Market Trends

Fleet Becomes an Epicenter for Interdepartmental Encroachment

August 28, 2008

by Mike Antich - Also by this author

Interdepartmental conflicts are common in the medical and IT industries, and at most companies between sales and operations. However, for many years, fleet existed as a realm of its own. Management in other departments often didn’t fully understand the nuances of fleet management other than they got a new vehicle every 36 months. Fleet managers of that era (not that long ago) were the “kings” and “queens” of their own realms. However, that reality is rapidly changing. Consider the following e-mail I received from a fleet manager.

“Fleet managers used to be in control. Now there is SO much visibility to our jobs – sourcing, legal, HR, finance, sales, service, EHS, and Green. You can no longer do anything without getting approvals or buy-in from every department, which means you spend so much time planning and playing games. Nothing ever gets done in a timely fashion anymore,” wrote the fleet manager who asked to remain anonymous.

This sentiment is echoed by many other fleet managers and fleet suppliers. This has been going on since the last decade brought on by three powerful corporate crosscurrents – safety, sourcing, and resource constraints – which have reached a confluence at fleet.

Safety is an Interdepartmental Focal Point

Fleet managers are under pressure to minimize preventable accidents. Often the company HR, legal, and risk management departments are driving these pressures. For instance, corporate risk management has become more influential in the types of vehicles added to fleet selectors. Another department with a growing influence on fleet safety is the Environment, Health & Safety (EHS) Department. It is responsible for employee safety issues elsewhere in the company, such as the factory floor and workstation ergonomics; why not fleet vehicles? EHS departments are extending their reach into fleet because company drivers are one of the largest sources of Workers’ Comp claims.

The entire decision-making process in accident preventability management has evolved from being fleet department focused to corporate committees. In general, participants on these committees include representatives from HR, legal, risk, sales, and operations. In the past year, one supplier watched an HR department go from totally disinterested in fleet safety to totally involved. The moment risk management realizes the lost dollars involved in preventable accidents is when they decide to get involved in fleet safety. For instance, one company changed its risk management priorities by assigning a senior vice president of operations, two levels above fleet, full responsibility for every driver on the road. Likewise, finance and legal departments see the fleet safety “problem” in terms of dollars. Money always draws attention, especially when cost increases reach an arbitrary “red flag” threshold.

In a litigious society that views corporations as deep-pocket ATMs, cross-functional involvement in minimizing preventable accidents and subsequent liability exposure appears to be the new norm, with fleet being one spoke in a multi-spoke endeavor.

Sourcing is Another Crosscurrent

The migration of large corporations to strategic sourcing has caused corporate procurement departments to become the engines of change in fleet management at Fortune 500 companies. The emergence of strategic sourcing in the 1990s has altered corporate purchasing and forced changes in fleet purchasing and the supplier selection process. Procurement departments are very influential in vendor selection, contract negotiations, service level agreements, and ongoing supplier management. Strategic sourcing initiatives re-examine the way a corporation conducts its business and are tasked to identify opportunities to consolidate purchasing volume to obtain reduced pricing from key supplier partners. Strategic sourcing initiatives are launched on several fronts to reduce costs in a number of “spend” categories, including fleet management.

In years past (pre-1990s), most fleet managers negotiated sourcing decisions and vendor contracts, which were then submitted for approval to senior management. This responsibility has been migrating to sourcing groups. At many companies, this responsibility is now under the purview of strategic sourcing fleet groups, which typically includes a cross-functional team, which brings the fleet manager together with representatives from other departments in the company. The presumed benefit of a cross-functional team is a more thorough examination of the fleet purchasing and supplier selection process from a wider range of interests and perspectives. However, strategic sourcing groups are often single-focused in their goal. Frequently, the single focus is cost cutting. Looking forward, strategic sourcing will be firmly entrenched in fleet procurement for many years to come, perhaps permanently.

Fleet Managers are Stretched Thin

The third crosscurrent is that many fleet managers have taken on greater responsibilities, albeit without an increase in staff. The day of the fleet manager handling only fleet is gradually becoming less the norm. Fleet managers who excel at their corporations have taken on diverse management responsibilities, but the downside is that the total amount of time they can devote to fleet has been reduced, sometime dramatically. Fleet managers say they no longer have enough hours in the day to keep track of everything in our industry as was done before.

Since the dawn of the fleet management profession, fleet managers have faced the dilemma of balancing the HR/driver requirements versus finance/accounting department requirements, which are often at odds with one another. However, in today’s environment, this balancing act has reached a crescendo as fleet managers struggle to balance these internal relationships (not easy) while meeting the demands of the corporation and keeping drivers happy.

Persuasively Articulating Your Convictions

Fleet managers have limited resources at their disposal and are stretched thin. This gives rise to other departments encroaching into areas that have traditionally been the domain of fleet. The notion of interdepartmental conflict is not new. In researching this article, I have located management studies conducted as far back as the 1950s discussing interdepartmental conflict and its resolution. Interdepartmental conflict can have a corrosive effect on how departments work with one another. Out of this departmental friction, negative stereotypes develop, as do efforts to downgrade the performance of the other party – with fleet often the target of these barbs. Unfortunately, some (not all) fleet managers don’t have as powerful a voice as other department managers, despite the fact that decisions are being made that will impact fleet operations. Fleet managers need to persuasively articulate their positions to senior management and have the courage to take a stand based on their convictions.

Let me know what you think.

[email protected]


  1. 1. Ross Friedmann [ August 29, 2008 @ 12:00PM ]

    “Fleet managers used to be in control. Now there is SO much visibility to our jobs – sourcing, legal, HR, finance, sales, service, EHS, and Green. You can no longer do anything without getting approvals or buy-in from every department, which means you spend so much time planning and playing games. Nothing ever gets done in a timely fashion anymore,” wrote the fleet manager who asked to remain anonymous

    After reading this quote, I would like to add that if it's any consolation, we as manufacturers, face similar hurdles within our organizations. The question is always: Do we want to devote the resources to fleet / commercial sales? Fleet is often seen as the go-to dept. at the end of the month.

    However, when it comes to being an integral part of the sales planning process, we too, have to get buy-in and approval from many other departments before publishing incentives, volume programs, and other programs which our commercial clients require. Trying to convince a "retail-mindset" that commercial sales makes a lot of sense to cultivate and retain is not always easy.

  2. 2. Rosalie Falato [ August 29, 2008 @ 12:46PM ]

    Great article. I can relate completely. I've gone from fleet administrator working with a fleet manager to fleet manager to S G & A Buyer. Most of us no longer have the luxury of devoting the necessary time to fleet to keep it all hands on. In the "today" of fleet managers, our hands and hats are in the ring for everything from travel to office equipment to safety equipment to disposal contracts - you name it. We survive because we're good at what we do. Fleet trains you to be ready for change. There are so many aspects to running a fleet that we almost wear different hats as fleet managers. And yes...we are a great bunch! I'm yet to meet another fleet person who isn't wiliing and anxious to help solve any problems or share any experience.

    Thanks for some great articles and truly being in the know

  3. 3. Al Cavalli [ September 02, 2008 @ 07:48AM ]

    Mike, having just read your column on the captioned subject, I first want to emphatically agree with your concluding statement:

    "Fleet managers need to persuasively articulate their positions to senior management and have the courage to take a stand based on their convictions."

    Having said that, I'd like to add that interdepartmental cooperation has always been an integral part of fleet management. The Fleet Manager must establish & retain a relationship with each of the affected departments to ascertain their interests, keeping them informed and to get their help in establishing fleet's part of the job! Each of them have a vested interest which must be considered. A Fleet Manager who has developed and nurtured such a relationship in the majority of cases would not be facing the problem you mention.

  4. 4. Tony Orta [ September 17, 2008 @ 03:23PM ]

    I found your article on departments that are becoming more involved in fleet operations to be very well laid out and on point. I routed your article to my fellow managers with the comment that the key to the issue is in the last sentence of your article.

    "Fleet managers need to persuasively articulate their positions to senior management and have the courage to take a stand based on their convictions."

    I believe that dialogue on this subject must continue with fleet professionals, now more than ever, so that they can collectively identify ways to promote and represent fleet. It is imperative that fleet professionals do not underestimate the need to establish credibility by going after successful strategies and solutions that are effective, and just as important, the need to develop and maintain marketing approaches within their respective companies.

    A good number of fleet veterans that I talk to often spend a lot of time criticizing involvement by non-fleet people within their company rather than seeking ways to partner and educate them to a level sufficient to garner their support. I have reported to many non-fleet experienced supervisors over my 30 years at So Cal Gas. However, the mantra that I developed early in my career when proposing solutions, organizational structure changes, our supplier partnerships, is…" I need my boss to see what I see".

    It is incumbent upon all fleet professionals to learn what is important to senior management, environmental, safety, legal, etc., and incorporate that into their approaches and decision making.

    Nice job, and keep up the great typing.

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Mike Antich

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Mike Antich has covered fleet management and remarketing for more than 20 years and was inducted in the Fleet Hall of Fame in 2010.

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