A nationwide survey of 29 cororate fleet managers was conducted by Automotive Fleet magazine. Five of the top 10 issues facing fleet managers in 2001 are: high cost of fuel; difficulty in recruiting and retaining employees; management pressure for cost containment; mergers and acquisitions; and transition to e-commerce. Two are cost related, one is personnel, one is company ownership and the last is vehicle management via the Internet. These are important issues to corporate and police fleet managers alike.
These are important issues, but the most obvious issue to public fleet managers is missing: the availability of funds to buy vehicles. Without vehicles, the manager has no other issues. A big difference exists between public and private fleet management. In the corporate world, vehicles are used to service customers, sell products and distribute products or services. These vehicles make profits for business and are a business' lifeline.
In government use, these vehicles do not make a profit, but they provide a specific service to the public. Public agencies must justify their very existence at every budget cycle. Though their bottom line is not profit, the quality of service provided is evaluated. Funds are appropriated, or decreased, based on very little logic and forethought on how a specific agency is impacted. This may not be how the budgeting process works for all public agencies, but it certainly is a common thread among most.
Getting sufficient funds to buy vehicles and establishing an annual program to replace vehicles are the most pressing problems facing law enforcement fleet managers. Many departments, such as the Missouri State Highway Patrol and the California Highway Patrol, replace police vehicles at a designated mileage. However, it becomes increasingly more difficult for departments with these policies to get annual support without having to analyze different alternatives of when to trade vehicles in order to money providers on how police cars are used and how they differ from conventional vehicles. Some legislative leaders just don't understand the difference.
For fleet managers, there is no secret recipe on how to replace those aging police cars. It is straight math called life cycle cost analysis. This involves figuring out the costs to buy new vehicles, calculating operating and replacement costs, and figuring the overall cost for operating vehicles.
Many good articles and books exist on life cycle cost analysis. One article, in particular, stands out. The May/June issue of Business Fleet contains an article by Cheryl Knight that breaks out this process in five easy to follow steps: Determine net acquisition cost; Estimate depreciation; Calculate other fixed costs; Determine estimated operating cost; and Calculate the estimated lifecycle cost.
Though this is an essential part of managing a fleet, every fleet manager may not do this type of analysis to the letter, but it's done in some fashion. The bottom line is dollars and cents: what does it cost to buy, to operate, to replace, and what kind of replacement cycle meets department needs?
Budgeting, forecasting and what-ifs can be planned for, but there is no guarantee the funds necessary to keep a fleet strong will be available. …