Automotive Fleet

OCT 2013

Magazine for the car and truck fleet and leasing industry

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SPONSORED BY: Automotive Fleet and Leasing Association (Left Photo) Laura Jozwiak, VP of client relations for Wheels, Inc., presented Malcom with his Professional Fleet Manager of the Year award. (Right Photo) During the AFLA Conference, Malcom took a moment to catch up with AFLA President John Domchowsky of Mondelez (far left) and AFLA Past President Mark Conroy of Union Leasing (center). Wheels and AFLA sponsor the annual award. primarily uses two models for the mobile vehicles, the Chevrolet G 1500 Express Van and Ford Transit Connect. Another important change in the company's feet vehicles was the introduction of domestically assembled foreign vehicles, including Toyota, Nissan, and Subaru models into the feet. Te change led to increased driver satisfaction and reduced cost of ownership. "It does not matter what a vehicle costs to purchase, only what it costs to operate," Malcom stated. "Toyota, Nissan, and Subaru models now make up approximately 35 percent of our feet. Tey were all chosen for their cost efectiveness and ability to do the job." Tis change was possible as a result of the operational cost of these vehicle models coming in line with other vehicles in the same class. Downsizing by Half Te State Farm feet's business model has undergone a signifcant transformation over the past decade. When Malcom arrived at State farm in 2001, the feet possessed in excess of 21,000 vehicles. As the business model evolved, so did the feet, and today the feet size stands at just over 11,000 vehicles. "Te entire process took years to achieve. It started with asking a lot of questions, understanding why we had done things the 32 AUTOMOTIVE FLEET I OCTOBER 2013 way we had, and asking why we could not do things diferently," Malcom explained. "We implemented stricter parameters, increased vehicle lifecycles (from 50,000 to 75,000 and now 85,000 miles for most vehicles), and called for a moratorium on all vehicle purchases." Te stricter parameters for any vehicle additions start with requiring: ● 15,000 business miles per year. ● Minimum usage of three business days per week. ● Not to be used as a primary vehicle for commuting to and from home to an ofce. ● No personal use allowed. Te feet management team also did a better job of analyzing need and business utilization by focusing on monthly mileage and days of use (thanks to the new feet management sofware program).  "Many times a driver may only drive 25 or 30 miles per day, but he or she may use the vehicle fve days per week all day," Malcom said. "We have to be careful about trying to have a one-size-fts-all vehicle approach." At the same time as the vehicle parameters were changing, modifcations in the company's insurance business model were taking place — State Farm consolidated a large number of ofces, and many of the company's drivers began and ended their day from home (mobile workers or telecommuters). "It was like the perfect storm and has resulted in a 50-percent decrease in our feet size," Malcom said. Staying Proactive in a Changing Industry When looking back at his time in feet, Malcom ofers up some valuable lessons learned to keep feet costs in line and operations efcient. "Don't ever be satisfed with the status quo. So many things are always changing, you must keep looking for a better way, a better vehicle, diferent equipment, pretty much everything," he stated. Malcom also advocates the benefts of reading all you have time to read about the industry, talk to other feet managers, and always look at total cost of ownership. "Don't get hung up on what a vehicle costs," he said. "Te important thing is what the cost is to your company to operate that vehicle. Tere is so much more to the process than just looking at capital cost and discounts." Looking into the future, Malcom predicts that the State Farm Mutual feet will continue to evolve as the company's business model continues to change. "It will all be about providing our drivers with the best transportation tool possible," he said. "It needs to be safe, comfortable, and provide them with a vehicle that will satisfy both their and our business needs. AF

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