Proposal
to Develop, Design and Implement a
Fleet Management Strategy for ELM
Contents
1. Proposer........................................................................................................................................2
2. Proposal Objective.........................................................................................................................2
3. Project Deliverables.......................................................................................................................2
4. Processes to be applied by the Proposal to meet Project Deliverables.........................................3
1. Fleet Audit.................................................................................................................................3
6. Required outcome of Fleet Audit...............................................................................................5
Operating Efficiency of the Fleet.......................................................................................................6
Required outcome of Operational Efficiency upgrade.......................................................................8
Cost Optimisation..............................................................................................................................9
Required outcome of Cost Optimisation.........................................................................................11
7. Project Deliverables.....................................................................................................................12
Project Management Strategy.........................................................................................................12
Comprehensive Roll out strategy.....................................................................................................12
Fleet management audit Strategy and action plans........................................................................13
Fleet Management Procurement plan.............................................................................................13
Fleet Replacement Strategy.............................................................................................................13
Information systems........................................................................................................................14
8. Proposal Knowledge and Experience...........................................................................................15
Key Personnel and responsibilities..................................................................................................15
CVs of Key Personnel.......................................................................................................................15
9. Pricing..........................................................................................................................................15
1
Proposal
to Develop, Design and Implement a
Fleet Management Strategy for ELM
1. Proposer
This proposal is submitted by AHM Business (the Service Provider) represented
by Andries Mulder.
2. Proposal Objective
The proposal is aimed at integrating the Emfuleni Local Municipalities fleet for
optimal performance and to formulate a cost saving strategy in the
procurement and management of its fleet. This should also provide an up to
date asset management register with real time updated assets and systems.
The council fleet is comprised of 616 vehicles. The service provider will be
expected to manage, coordinate the project and oversee its implementation
which involves the following:
Conduct a fleet audit and outline recommendations
Develop a fleet management business case
Develop and implement the fleet management strategy
3. Project Deliverables
Project management strategy
A comprehensive rollout strategy
Fleet Management audit strategy and action plans
Fleet Management procurement plan with options and
recommendations for best fit model
Fleet Replacement strategy
Integration of Fleet management information with Emfuleni Local
Municipalities current systems
o Fleet management System
o Fleet and Fuel Monitoring system
o Education Training and Development
2
Proposal
to Develop, Design and Implement a
Fleet Management Strategy for ELM
4. Processes to be applied by the Proposal to meet Project Deliverables
1. Fleet Audit
In order to achieve the requirements, the proposal will undertake the
following:
Identify and evaluate CURRENT fleet management processes:
a. Vehicle Procurement including tender processes, vehicle selection
requirements, authorisation procedures
b. Funding Methods and their match to Emfuleni Local Municipalities
financial facilities and requirements
c. Disposal Methods to ensure compliance to MFMA requirements
and maximisation of resale values
d. Maintenance and service scheduling of all vehicles, including
preventative maintenance of yellow equipment and waste
compactors, safety certification and compliance to scheduling
e. Service and repair of vehicles including use of internal and
external facilities
f. Operating cost management including tender processes,
procurement methods, expense pre-authorisation, verification,
recording and analysis (fuel, maintenance and accident repair)
g. Insurance including processes, risk management, claims
management and accident management processes
h. Fines management including readiness for the introduction of
AARTO legislation
i. Vehicle tracking systems including the measurement and
management of vehicle movement, Driver Identification systems
and driver behaviour
j. Fleet Cost and Operating information systems and their
integration with current systems
3
Proposal
to Develop, Design and Implement a
Fleet Management Strategy for ELM
2. Identify Fleet Profile
a. Current fleet structure including fleet numbers, user
departments, vehicle description, Age, Current Kms, Kms usage,
service record and general condition
i. From the above a Fleet list will be developed for each
department which additionally calculates the balance of
remaining useful life and projects replacement timing based
on vehicle type, monthly KMs utilisation, age and last
known condition
ii. This Fleet list will include estimate of current market values
iii. A vehicle inspection will be undertaken but should a
detailed vehicle inspection report be required which
includes photographs and authoritative commentary on
mechanical condition this will need to be prepared by the
ELM Fleet Manager or outsourced to a specialist supplier.
3. Identify and Analyse Fleet Costs
a. Identify operating costs (OPEX) including maintenance, fuel and
accident repair costs
b. Analyse expenditure, determining Cents per KMs (cpk) and trends
c. Identify capital costs (CAPEX) and analyse, comparing Capex and
Opex split
d. Review fleet budgets and performance to budgets
4. Identify and Analyse Equipment utilisation
a. Identify last known Kms / Hours and calculate monthly utilisation
b. Identify seasonal usage
c. Analyse vehicle movement information, sourced from vehicle
tracking systems
4
Proposal
to Develop, Design and Implement a
Fleet Management Strategy for ELM
5. Interview Managers and Supervisors
1. Assess current skills levels and identify fleet staff numbers and
responsibilities. This will facilitate the determination of future
staff structure, skills and training needs
a. Identify fleet management policies and their application
b. Evaluate cost management and budget review procedures
c. Identify current service delivery requirements / expectations and
inhibitors to service delivery
d. Identify strengths and weaknesses of current service provision
e. Identify and evaluate driver skills including training needs
f. Identify and evaluate skills of mechanical repair staff including
training needs
6. Required outcome of Fleet Audit
Identify current fleet, age, Kms, usage and condition. Incorporating
utilisation data will facilitate the development of a balanced fleet and
future vehicle replacement plan
Identify current fleet costs, budgets and performance to budget. This
will provide financial reference points and budgetary capability
Identify and evaluate current administrative procedures and processes
including cost identification and management. This will identify gaps in
current procedures and requirements for future beneficial cost
management
Identify fleet staff numbers, responsibilities and current skills levels. This
will facilitate the determination of future staff structure, skills and
training needs
5
Proposal
to Develop, Design and Implement a
Fleet Management Strategy for ELM
Operating Efficiency of the Fleet
In order to achieve the requirements of this proposal the Service Provider will
undertake the following:
1. Evaluation of CURRENT FLEET POLICIES and their upgrade defining
processes to be applied and policy requirements within each key area:
Financing and Replacement Timing
Procurement Methods (Vehicles and Services)
Licensing and Fines Management
Asset Disposal requirements
Maintenance Management
Insurance and claims management
Accident management
Fuel Management procurement and daily management
requirements
Information systems & Administration
Driver services and support
Vehicle tracking and Security systems
Replacement vehicles
2. Introduce a program of measured vehicle usage
a. Identify vehicle GPS tracking requirements
b. Identify movement management requirements in terms of driver
tagging, Kms usage, after hours usage and driver behaviour in
terms of speed, harsh braking and green band driving
c. Identify and evaluate requirements for Trip authorisation
procedures
d. Evaluate all options and propose a full range of solutions for the
measurement of vehicle utilisation
6
Proposal
to Develop, Design and Implement a
Fleet Management Strategy for ELM
3. Improve Productivity
a. Evaluate the departmental fleet needs, utilising information
gained from the fleet audit, and balance the fleet in terms of job
function, service delivery requirements, vehicle type, quantities
and driver / staff skills requirements
i. Incorporate into this balanced fleet structure those existing
vehicles that are functionally sound and have a balance of
useful life
b. Utilising information gained from the fleet audit develop and
implement training programs for skills upgrade in terms of vehicle
and equipment usage, preventative maintenance programs and
routine service and repair
c. Identify and evaluate opportunities for outsourcing of Servicing,
maintenance and repair, accident repair and tyre management
d. Evaluate vehicle specifications and identify alternatives that
potentially improve productivity and reduce costs, using the
whole life cost analysis method
e. Evaluate the utilisation of specialised and expensive equipment,
utilising information gained from the fleet audit, and identify and
evaluate alternatives that potentially improve productivity and
reduce costs
4. Upgrade operational and administrative processes, utilising information
from the fleet audit
a. Identify and evaluate “Best Practices” for fleet management
within Municipal and Public Sector fleets.
b. Develop and implement new and upgraded operational and
administrative policies and procedures
7
Proposal
to Develop, Design and Implement a
Fleet Management Strategy for ELM
c. Develop and implement new and upgraded processes for the
utilisation of vehicles and achievement of SERVICE DELIVERY
requirements
Required outcome of Operational Efficiency upgrade
1. Evaluation and upgrade of current fleet policies addressing 12 key areas
of fleet management
2. Evaluate options and recommend a GPS vehicle tracking solution that
measures vehicle utilisation, vehicle movements and driver behaviour
3. Identify and proposes a range of vehicles and equipment that provides
improved efficiency and reduced cost
4. Recommend a balanced fleet structure that meets service delivery
requirements, improves operating efficiencies and reduces costs
5. Develop and implement training programs for skills upgrade in terms of
vehicle and equipment usage, preventative maintenance programs and
routine service and repair
6. Utilising information from the fleet audit; identify, evaluate, propose and
implement “Best Practices” for fleet management within Municipal and
Public Sector fleets focussed on operational and administrative
requirements
8
Proposal
to Develop, Design and Implement a
Fleet Management Strategy for ELM
Cost Optimisation
In order to achieve the requirements of this proposal the proposal will focus on
the following:
1. The development of vehicle policies that define replacement time and
Kms based on reducing costs using the “Whole Life Cost” method and
incorporating projected economic life
2. Costs reduction gains will be made as a consequence of vehicle selection
and the identification of a balanced fleet in terms of job function, service
delivery requirements, vehicle type, quantities and driver / staff skills
requirements
3. The application of Utilisation Management processes, where the GPS
tracking system is utilised to measure vehicle movement and driver
behaviour, will reduce costs by minimising unnecessary and
unauthorised vehicle usage
4. Operating costs, chiefly fuel and maintenance which represent between
50 and 70% of the total cost should be the primary area of focus
4.1.Fuel management incorporating;
4.1.1. Fuel management policy
4.1.2. Utilisation of a secure on road fuel procurement system
4.1.3. Selection of vehicles with best fuel consumption
4.1.4. Focussed procurement on selected supplier (s) that
standardises source and improves fuel cost
4.1.5. Pump and wet stock management processes
4.1.6. Expenditure and consumption analysis, after each fill, that
identifies and assigns cost to consumption in excess of
consumption benchmarks
4.1.7. Analysis that identifies problem vehicles, suppliers and
drivers
9
Proposal
to Develop, Design and Implement a
Fleet Management Strategy for ELM
4.1.8. Quality information systems that detail expenditure by
vehicle, cost, litres, date, time, supplier and further analyse
expenditure calculating; consumption and the cost of excess
consumption
4.2.Maintenance Management incorporating;
4.2.1. Maintenance Management policy
4.2.2. Maintenance service scheduling
4.2.3. Preventative maintenance programs for heavy vehicles and
specialised equipment that minimises unnecessary wear and tear
4.2.4. Managed maintenance processes that pre-authorise
expenditure verifying diagnosis, cost and application of supplier
warranties / guarantees and manufacturer service and
maintenance plans
4.2.5. Optimised VAT administration processes
4.2.6. Quality information systems that detail expenditure by
vehicle, line by line service and repair description, date, time,
supplier
4.3.Accident management incorporating;
4.3.1. Best practices for claims management processing
4.3.2. Evaluation of quotations with a view to reduce costs
4.3.3. Application of workflow management to ensure prompt
repair and optimised vehicle utilisation
4.3.4. Supplier management to ensure quality repair to
manufacturer standards
4.4.Maximising resale values
4.4.1. by applying an inspection process that identifies unrepaired
damage, missed services and further ensuring that accident
damage is repaired promptly and to manufacturer specifications
4.4.2. Further selecting disposal processes that maximise resale
values
10
Proposal
to Develop, Design and Implement a
Fleet Management Strategy for ELM
Required outcome of Cost Optimisation
In order to achieve the requirements, the proposal will focus on the following:
1. The development of vehicle policies that define operating requirements
including replacement time and Kms
2. Developing a balanced fleet in terms of job function, service delivery
requirements, vehicle type, quantities and driver / staff skills requirements
3. The application of Utilisation Management processes utilising GPS tracking
system and unauthorised vehicle usage
4. Operating costs management incorporating Fuel management and
Maintenance Management
5. Accident management incorporating best practices for claims management
processing and evaluation of quotations with a view to reduce costs
6. Maximising resale values by ensuring that accident damage is repaired
promptly and to manufacturer specifications. Further selecting disposal
processes that maximise resale values
11
Proposal
to Develop, Design and Implement a
Fleet Management Strategy for ELM
7. Project Deliverables
Project Management Strategy
The proposal is of the view that the following statement is reflective of
Emfuleni Local Municipalities requirement and will apply this in developing a
Fleet Management strategy.
“Establish business procedures to provide a vehicle fleet that is mechanically fit
for purpose and designed for lowest total cost of ownership, is optimally
sized and operating under applied fleet policies enabling the Municipality to
exceed its Service Delivery mandate”
To achieve this, the proposal der will:
Conduct the fleet audit to identify the “Status Quo” in terms of current
Fleet Structure and Profile, Policies, Costs, Service delivery
requirements and skills.
Identify “best Practices” within Municipality and Public Sector fleets,
establish their relevance to ELM, and identify gaps in current Fleet
Structure and Profile, Policies, Costs, Service delivery requirements and
skills.
Focus on developing a solution that enables Emfuleni Local
Municipalities Municipality to meet its service delivery requirements
with best efficiency and least cost
Comprehensive Roll out strategy
A plan will be developed that details all activities incorporated in the Project
Description. Activities will include sufficient time for the Emfuleni Local
Municipalities Municipality Executive to evaluate, modify and approve key
activities and requirements. All activities will be:
Fully Described with a reference number
Start date and completion dates for each activity will be given
12
Proposal
to Develop, Design and Implement a
Fleet Management Strategy for ELM
The critical path for this project will be defined
A Gantt chart will be prepared, published and strictly managed
Fleet management audit Strategy and action plans
The Fleet Audit will evaluate the current Vehicle Fleet, Policies and procedures,
administrative procedures, BBBEE procurement requirements, skills levels,
information system requirements and service delivery requirements.
Timing for the initiation, evaluation and completion of the fleet audit will be
incorporated in the Roll out Program
Fleet Management Procurement plan
The fleet procurement plan will incorporate
Vehicle selection and equipment specification
Vehicle funding options and requirements
BBBEE requirements
Procurement options for Fuel, Maintenance and Accident Management
systems
Training requirements and procurement options
Fleet Information systems, their integration with current systems and
user training
Fleet Replacement Strategy
The fleet replacement strategy plan will incorporate
Emfuleni Local Municipalities vehicle requirements, by category type
The development of a Fleet Replacement Policy by identifying a vehicle’s
useful life (by category) and the calculation of optimal replacement
timing using “Whole Life Cost” methods
The application of the Fleet Replacement Policy to current vehicles to
determine future replacement timing
13
Proposal
to Develop, Design and Implement a
Fleet Management Strategy for ELM
The Fleet Replacement Strategy document will include a FEASIBILITY
STUDY
The Feasibility Study will incorporate
o Emfuleni Local Municipalities recommended total fleet structure
(Fleet Plan)
o The balance of useful life for CURRENT vehicles to the
replacement date
o New vehicle requirements to meet Emfuleni Local Municipalities
fleet plan
o Estimated costs of new vehicles and equipment
o Estimated resale values
o Estimated operating costs of Fuel, Maintenance, Insurance,
Accident Repair Costs, License and registration, information
systems and selected outsourced services (market related costs)
o Administration and management fees
o Risk Analysis
o This feasibility study can become the foundation document for
any future proposal processes
Information systems
The fleet information systems plan will incorporate
The identification of Emfuleni Local Municipalities fleet information
systems incorporating fuel monitoring and analysis
The identification and evaluation of “off the shelf systems”
Integration requirements with Emfuleni Local Municipalities current
systems
The identification and evaluation of requirements and costs to modify
the “off the shelf systems” to Emfuleni Local Municipalities integration
requirements
The identification of training requirements and costs
14
Proposal
to Develop, Design and Implement a
Fleet Management Strategy for ELM
8. Proposal Knowledge and Experience
This proposal is submitted by Andries Mulder who has extensive experience in
Public Sector fleet and Fleet management in general
Key Personnel and responsibilities
CVs of Key Personnel
9. Pricing
15
