NAFA CEO Phil Russo, CAE: Learning A New Language Isn’t So Hard

Mention the word "procurement" to corporate fleet managers these days and you’re likely to see them shiver, shake their heads, and utter a few unmentionable words. I’ve spoken with many fleet managers recently who were visibly frustrated trying to get their points across to new procurement bosses.

So what’s all the frustration about?

First, I think the frustration stems from change. Change can be difficult and is typically met with some kind of resistance. And fleet reporting to procurement is a change in many organizations. For these companies – by some estimates 60-70 percent of corporate fleets – procurement now plays a significant role in what were primarily fleet decisions. With fleet decisions now being dictated by, or at least overseen by, procurement parameters, some fleet managers are resisting.

Second, procurement professionals focus on different, and sometimes conflicting, aspects of acquisition than fleet managers. Fleet managers focus on job suitability of a vehicle, safety, company image, employee satisfaction, and total cost of ownership. In short, fleet managers take a long-term look at the acquisition of a vehicle; some may even say a strategic look.

Procurement professionals often focus on the here-and-now. For them, vehicle acquisition is all about cost avoidance and negotiating savings now. Their concern for the net present value – right now – trumps the longer term, more strategic look inherent in a TCO or lifecycle cost model. Some of my fleet manager colleagues also tell me that procurement folks have taken the human element completely out of their equations. There is no consideration at all given to driver satisfaction or the impact on the company if drivers are unable to perform their work. Likewise, there is no consideration given to the impact on the company if drivers are unhappy about performing their work in a different type of vehicle that costs less but is perceived as a downgrade from a vehicle driven in the past.

So how can fleet managers learn the different language of procurement so they can survive and thrive?

First, understand that procurement isn’t new. Government fleet managers have lived in and survived in this world for a long time. That’s why NAFA has always provided resources about this subject in each of our seminars, in our Certified Automotive Fleet Manager and Specialist programs, and elsewhere. Every fleet manager would do well to attend the seminars, enroll in the CAFM program, and avail themselves of the many resources online that NAFA provides. For instance, I recently spoke with two fleet managers who used NAFA’s recommended "fleet score card" to illustrate to their procurement bosses their fleets’ costs, savings, and value.

Second, considering the experience of government fleet managers, I suggest that corporate fleet managers could learn some great strategies from these folks about how they’ve survived. I know there are groups out there that segment the fleet industry into every niche possible, but in some respects they’re doing you and this industry a disservice. Don’t get me wrong, I know and understand the value of networking with someone who does what you do in your industry. That’s why NAFA has special interest groups, different "tracks" of sessions at our annual conference, and other resources to meet specific needs. But NAFA’s real strength lies in our size and our diversity. We’ve said all along that there’s a home for you here at NAFA regardless of your fleet size, location, or segment. Corporate and government fleet managers can and should learn a great deal from each other – and can do so under NAFA’s roof.

Third, build strong alliances, allegiances, and supporters within your corporate structure. Some companies have already started on this idea by creating "category" or "segment" managers for each operational area and stakeholder group. In this scenario, fleet has an equal voice and is at the table for procurement decisions and can ensure fleet needs are met. In other scenarios, however, you will have to build your own cadre of supporters, whether that be from sales, marketing, end-users, or other stakeholders. You need to make sure that your stakeholders understand your value and your position and are willing to go to bat for you.

Finally, if you have not done so already, register for NAFA’s I&E and attend the sessions specifically about procurement. These include:

•    Learning to Thrive in a Strategic Sourcing Environment, Tuesday, April 14, 10:30 am
•    Creating Bid Proposals to Achieve Results Sooner Rather Than Never, Tuesday, April 14, 2 pm
•    Mining Gold from Your Supply Chain, Tuesday, April 14, 3:45 pm
•    Strategic Partnerships - One Step at a Time, Wednesday, April 15, 1:15 pm
•    Cutting Costs Without Cutting Corners, Thursday, April 16, 2:45 pm
•    FLEET MANAGERS ONLY! Procurement! Sourcing! Inventory! Oh My!, Friday, April 17, 9 am

Yes, fleet and procurement may speak different languages, but learning a new language is not difficult. NAFA already has the tools to help you!

Successful vehicle procurement in any organization relies on close cooperation between the fleet manager, the procurement specialist, and the user. The user should define the requirement and be kept up to date throughout the process. Procurement personnel can lead the myriad of RFP-related and evaluation functions. It is the fleet manager, however, who can be trusted to provide the strategic input on total cost of ownership and valuable insight on impacts to safety, image and morale. Clearly defining these roles in a detailed fleet management policy prevents misunderstanding and assists all parties in working together in the organization’s best interest.

Let me know what you think!

Sincerely,

Phil
prusso@nafa.org

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