Car fleet

Car Fleet: Centralized Management, Advantages or Constraints?

Published By

Jeremy Ferrer

Definitions of perimeters (and pros respective)

Centralize the management of a fleet means that the responsibility lies entirely with the head office. Each management decision is taken by the General Management and communicated to the subsidiaries for implementation.
However, collaboration with local officials is necessary for real adoption.A “decentralized” car fleet involves (almost) independent management by subsidiaries of the Company.

If the decentralization is partial, certain responsibilities are granted at the subsidiary level such as the preparation of vehicle orders, financial impacts, etc.
In the case of a total decentralization of the car fleet, local entities have their own fleet manager, who can choose tooutsource fleet management.

It seems to be a simple approach because it presents three major advantages :

Les human resources are limited to a small team, and, as a result, the expertise acquisition curve is acquired in a short time and at a high level.
The recruitment of the fleet management team is concentrated in only one department
La Construction of the Car Policy and various internal and external communications, is done in a way homogeneous and very effective.

Decentralization total or partial presents Two advantagess:

Responsibility for financial results is often the responsibility of the Profit Center (division, region, subsidiary). In a society where the Car fleet is homogeneous, the fleet manager will be in charge of budgeting.
Profit centers have every interest in controlling how the fleet is operated, and in particular its budgetary impact

Selection ofthe vehicular

Centralized Management : For businesses with a homogeneous fleet, fleet management is consistent at the group level. This allows for a better cost management, better expertise which would be impossible to obtain at the level of a local entity (division or subsidiary). Decentralized Management : very often, the head office is not aware of the missions of the drivers or the constraints of the field. Of critical elements such as cargo volumes, geography, topography, and mileage can be difficult to assess accurately in a centralized environment. Allow local managers to be integrated into a validation circuit offers more efficient management and avoid uncontrolled additional costs.

Services of managerial of The floats

Centralized : These are mainly 4 main areas:

Fuel,
Maintenance/repair,
Claims Management
Vehicle renewals.

Centralizing service delivery is complicated because the first three points above involve regular and continuous activity at the local level.

Decentralized : A branch or division manager responsible for the profitability of its profit center has a certain level of control over vehicle choices and financing methods.

The establishment of authorization limits, of a budgetary validation and control circuit makes it possible to meet everyone's requirements.

The economies of scale achieved through centralization are not always obvious. A local entity offering a regular flow of business to local suppliers will in return be able to benefit from substantial discounts or significant services such as the delivery of the vehicle to the premises.

Main advantage of centralizing services

The collection and dissemination of data on the costs incurred by services from a single frame of reference. The Company can then execute a single schedule on the various management operations (revision, technical inspection, etc.).

Main benefit of decentralizing services

Management is often controlled, provided that fleet managers are responsible for the results.. This argument is reinforced when prices and services are negotiated locally.

Piloting of The Fleet

Centralized : 4 main types of daily activities can be treated at the headquarters level:

Les interactions with suppliers,
The establishment of a Car policy,
La communication to drivers,
The interview

Field operators generally lack resources or equipment, such as software tools in particular. A single source allows the best management of a regular flow of information to drivers and local entities (agency managers)

Centralization is often imposed by the historical allocation of human resources. Thus, a change in organization requires time and the head office is best equipped to manage numerous cross-functional functions, including the car fleet.

Decentralized : Although rarer, a decentralization of fleet management is not impossible. For example, if the head office is in France, operations in the United States will be difficult to manage, if only because of the time difference. The implementation of global procedures such as the Car Policy and driver support can make these local problems are much easier to manage in a decentralized context.

Want to know more?

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