4 key trends in global fleet sourcing and management that are making a difference
Last month, US-based global fleet owners gathered in Chicago and New York for a Global Fleet Summit organized by LeasePlan International. During lively sessions, trends and best practices in global sourcing and the day-to-day practice of fleet management were discussed in detail.
From these discussions, four key trends emerged that appear to be making the difference for both global sourcing and global fleet management professionals. Here’s what these organizations have been doing.
1. Centralization – of shared processes
Centralization of shared activities – including global fleet sourcing and management – is fast being embraced by global organizations. Attendees cited the following key reasons for centralization of their corporate activities and related policies:
- As response to increasing competitiveness in the global market place
- In order to establish core standard business processes for greater consistency and value
- To adequately manage increasing complexity
- To achieve greater strategic focus
- Placing fleet management and procurement in the spotlight organization-wide.
2. Moving from cost savings to business value
Cost savings are often a major drive – if not the major drive – of any procurement strategy. But the trend now is to look at more than just plain cost savings. Organizations are moving towards cooperation that delivers not only cost savings, but added business value as well.
From a sourcing or procurement point of view, this entails procurement departments working together with internal stakeholders to contribute to the final contract and price negotiations. But, it can also mean they get involved in earlier stages of the sourcing process, for instance in defining the best solutions for the business that needs to be sourced.
From a fleet management perspective, this calls for a continued shift from a commodity pricing focus to an overall value and service focus. The shift from transactional relationships into strategic partnerships has delivered clearly measurable and sustainable business value for many companies already.
3. Partnering with internal stakeholders
Procurement and fleet management teams alike are recognising the need for central leadership that can drive a global strategy, whilst ensuring engagement is locally driven.
This appears to especially be the challenge facing large – often complex – organizations. Such players are finding that simply drawing up a central policy is not enough. It takes much internal marketing effort and salesmanship to achieve buy-in amongst stakeholders, including budget owners and in-company users, within the organization.
Key here is to partner with the relevant internal stakeholders at an early stage. This results in a better definition of the solutions that can provide true added value. And, by extension, such well-defined and relevant solutions will, in turn, establish the Global Sourcing Director or Global Fleet Manager as expert business partner.
4. Embracing technology for insight and control
Insight comes before control: this holds true for most business departments in a global organization. Procurement and fleet management are no exception to this rule, resulting in procurement professionals increasing their investments in relevant management systems. They are fast discovering the many advantages to be obtained from such systems for aggregating spend, registering supplier negotiations, avoiding rogue spending and supporting supplier relationship management.
The same applies to global fleet management: global reporting systems are key to providing insight into company-wide performance, including areas such as cost control and reduction, policy effectiveness and emissions reduction.