Controlling fleet costs the structured way
When Catholic Relief Services (CRS) East Africa had its fleet performance assessed by Fleet Forum several months ago, they were surprised by the results.
The good news was that their vehicle costs were not as high as they had anticipated. The bad news, though, was that their fleet was bigger than their operations dictated, causing unnecessarily high running costs.
“Fleet costs are a significant part of total CRS East Africa costs, so it is an important area in terms of our overall investment,” said Syon Niyogi, Deputy Regional Director of Management Quality at the Catholic Relief Services East Africa Regional Office.
Fleet Forum piloted the Fleet Management Standards Assessment and Fleet Management KPI (Key Performance Indicator) project in each of the CRS East Africa regional country offices in Kenya, Tanzania, Ethiopia and South Sudan. The primary purpose was to pinpoint potential cost savings within CRS’s regional operations. The added benefit was that it helped them to identify improvements to the effectiveness, safety and environmental impact of its fleet.
CRS East Africa’s biggest challenge is to reduce its fleet management costs and improve performance “We now realise that in some countries we have a large fleet and lower numbers than required. In those locations, there is a need to reduce fleets and move them to other countries. This will help to increase cost efficiency and performance,” said Niyogi.
The assessment helped the INGO to adopt a more methodical approach in the East African Region that would allow them to better determine the most appropriate fleet size for its operations.
“We are also putting targets in place in order to bring down the operating costs of our fleet in each of our East Africa country offices. And we have implemented the Key Performance Indicator (KPI) sheet to help fleet managers focus in a structured way on expenditure, usage and fleet size and routinely follow-up on progress.”
Fleet Forum’s KPI methodology also helped CRS to discover other obstacles too, namely a decentralized approach to fleet management with unstructured policies and procedures. Reducing the environmental impact of its fleet also posed a significant challenge.
“It’s difficult to lower carbon emissions and high maintenance costs with old, fully depreciated vehicles,” explained Niyogi.
Better driver safety measures are also being implemented, such as conducting Safety and Fleet Management trainings for its partners in Ethiopia, South Sudan, Tanzania and Kenya.
While it is still too early to assess the impact of its targeted improvements, CRS East Africa plans to provide all fleet managers in future with a detailed report of their fleet in order to help them further reduce their operational costs and carbon emissions.
Each country office is also working on targets to reduce its fuel consumption in order to reduce its overall running costs.
“The Fleet Management Standards tool is very useful because it identifies key areas of operational concern and opportunities for improvement. We are now using it in our proposals and donor submissions,” said Niyogi.