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Accenture Management Consulting

Accenture Management Consulting Applying Industry Best Practices to Federal Fleet Management – The Case for Total Cost of Ownership June 28, 2012. Federal Fleet Challenges. Presidential Memorandum: Federal Fleet Performance

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Accenture Management Consulting

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  1. Accenture Management Consulting Applying Industry Best Practices to Federal Fleet Management – The Case for Total Cost of Ownership June 28, 2012

  2. Federal Fleet Challenges Presidential Memorandum: Federal Fleet Performance “We owe a responsibility to American citizens to lead by example and contribute to meeting our national goals of reducing oil imports by one-third by 2025 and putting one millionadvanced vehicles on the road by 2015.” GSA Guidance Bulletin FMR B-15 Fleet Management Information System: Implement a centralized system to identify, collect, and analyze motor vehicle data with respect to all costs incurred for the operation, maintenance, acquisition, and disposition of motor vehicles. Bulletin FMR B-30 Fleet Management Plan: Annually describe how your agency will achieve its optimal fleet inventory, alternative fuel schedule, sourcing decisions, and incorporate in strategic sustainability performance plan. Bulleting FMR B-30 Vehicle Allocation Methodology: Annually provide a standard way to ensure that each vehicle in your fleet is correctly sized and is appropriate for accomplishing the agency missions.

  3. Total Cost of Ownership • By using a structured, diagnostic approach to calculate TCO, fleet managers will have the information needed to make difficult changes

  4. TCO is an easy-to-understand, but tricky to calculate, number that fleet managers can use to compare costs within their fleet, identify trends, and make replacement decisions Key TCO Drivers • TCO can be offset or reduced by: • Optimizing vehicle lifecycles (in years) • Decreasing individual vehicle utilization • Increasing disposal reimbursements

  5. TCO metrics provide visibility into true fleet costs and provide justification for Fleet Management policy decisions TCO Example Metric

  6. Implementing World-Class Fleet Management is a multistep, interlinked set of actions leading to lowest Total Cost of Ownership Mile Markers

  7. TCO in ActionFleet: Major Telecommunication Provider

  8. Fleet rationalization considers utilization metrics as well as mission needs, as should be considered in every agency VAM Fleet RationalizationSteps

  9. TCO in ActionFleet: Major Utility Provider

  10. Agencies with a myriad different vehicle classes and types can find cost savings through standardization Workshop Overview Class Phase 2 (1 hr/category) Sedans Type Key Questions & Issues Sub-Compact Compact Mid-Size Full Size 1 Can this class be replaced by another class to reduce overall number? Variations Upfit Package “A” 2 Can any of these vehicle types be combined with another to reduce the total? Specifications Standard Specs 3 Does this Up-fit Package meet all the business and operating functions required of the vehicle? 4 • Which specifications meet 95% of the business needs of the operating unit • Which can be eliminated or combined? • Which need to be added? Phase 1 (30 mins/category)

  11. TCO in ActionFleet: Major Telecommunication Provider

  12. Mileage Utilization Fleet diagnostics identify low performing vehicles that are prime candidates for rightsizing and/or replacement

  13. TCO in ActionFleet: Major Utility Provider

  14. Outsourcing fleet functions can lead to cost savings and improved performance Degree of Outsourcing Full Min Partial Fleet Maintenance OutsourcingIndustry Examples “Concerned with economics in a changing environment, fleet managers might find themselves considering outsourcing vehicle maintenance services. Allowing professional vehicle maintenance organizations to purchase, maintain and retire equipment, fleets can take advantage of an outside organization's expertise in maintenance and economic control of resources.”- John Dolce, “Outsourcing Strategies for Fleet Maintenance” X - Maintenance outsourcing is a growing trend in the US with fleets across industries. Source: Accenture Research

  15. Key Takeaways

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  17. Key Takeaways

  18. Contact Info Bob Pitts Senior Principal Accenture Management Consulting robert.j.pitts@accenture.com +1 678 657 9627 Karl Dedolph Senior Manager Accenture Management Consulting karl.c.dedolph@accenture.com +1 703 947 2505 About Accenture Accenture is a global management consulting, technology services and outsourcing company, with more than 246,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$25.5 billion for the fiscal year ended Aug. 31, 2011. Its home page is www.accenture.com. Improving Fleet Efficiency and Compliance Through Best Practices http://www.accenture.com/us-en/Pages/insight-simplifying-federal-fleet-conundrum-summary.aspx

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