Automotive Fleet

DEC 2013

Magazine for the car and truck fleet and leasing industry

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GLOBALIZATION with local implementation in presentations and discussions focused on feet sourcing, driver engagement, and a country market spotlight, in this case, on feet management in Mexico. During the lively open discussion sessions, trends and best practices in global sourcing and the day-to-day practice of feet management were examined in detail. During the discussions at the Global Fleet Summits in Chicago and New York City, four key emerging trends in global sourcing and global feet management were identifed. Tese trends were summarized by Reinier Willems, international marketing director for LeasePlan International B.V. Below are Willems' observations: OVERCOMING GLOBALIZATION CHALLENGES Build supplier relationships Implementing a new system 6% 6% Restructure 7% Redefne strategy 4% 16% Increasing communication/ involvement 11% SOURCE: LEASEPLAN Training local resources NOTE: TOTALS DO NOT EQUAL 100%, AS THE CHART REPRESENTS ONLY THE "TOP 5" CHALLENGES DISCUSSED. The most effective methods to overcome globalization challenges are training and communication. Much effort and "salesmanship" are needed to achieve buy-in among stakeholders, including budget owners and in-company users, within the organization. The key to success is to partner with relevant internal stakeholders at an early stage in the globalization process. Trend 1: Centralization of Shared Processes Te frst trend identifed was the centralization of shared activities, including global feet sourcing and management. Tis organizational concept is rapidly being embraced by a number of global organizations. Attendees of the LeasePlan Global Fleet Summits cited the following key reasons for centralization of their corporate activities and related policies: ● A response to increasing competitiveness in the global marketplace to establish core standard business processes for greater consistency and value. ● To adequately manage increasing complexity. ● To achieve greater strategic focus. ● Te need to place feet management and procurement in the spotlight organization-wide. Trend 2: Moving from Cost Savings to Business Value Cost savings are ofen a major driver, if not the major driver of any procurement strategy. But, the trend now is to look at more than just cost savings. Organizations are moving toward cooperation that delivers not only cost savings, but added business value as well. From a sourcing or procurement point of 46 AUTOMOTIVE FLEET I DECEMBER 2013 view, this entails procurement departments working together with internal stakeholders to contribute to the fnal contract and price negotiations. But, it can also mean they get involved in earlier stages of the sourcing process, for example, in defning the best solutions for the business that needs to be sourced. From a feet management perspective, this calls for a continued shif from a commodity pricing focus to an overall value and service focus. Te shif from transactional relationships to strategic partnerships has delivered clearly measurable and sustainable business value for many companies already. Trend 3: Partnering with Internal Stakeholders Te third trend identifed by attendees of the Global Fleet Summits is that procurement and feet management teams alike are recognizing the need for centralized leadership that can drive a global strategy, while ensuring engagement is locally driven. Tis especially appears to be the challenge facing large, ofen complex, organizations. Such corporations are fnding that simply drawing up a central policy is not enough. It takes much internal marketing efort and "salesmanship" to achieve buy-in among stakeholders, including budget owners and incompany users, within the organization. Key here is to partner with the relevant internal stakeholders at an early stage. Tis results in a better defnition of the solutions that can provide true added value. And, by extension, such well-defned and relevant solutions will, in turn, establish the global sourcing director or global feet manager, as the in-house subject-matter expert and internal business partner. Trend 4: Embracing Technology for Insight and Control Willems cited that it is important to remember that insight comes before control. Tis holds true for most business departments in global organizations. Procurement and feet management are no exception to this rule, resulting in procurement professionals increasing their investments in relevant management systems. According to Willems, procurement professionals 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. Te same applies to global feet management. Global reporting systems are key to providing insight into companywide performance, including areas such as cost control and reduction, policy effectiveness, and emissions reduction. AF

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