Engaging the Partnership Between the Fleet Department and Procurement

By David T. Hayward, Manager, Deloitte Consulting LLP

There have been long-standing tensions in some organizations between the fleet department and procurement. In reality, the relationship between fleet and procurement is a partnership, not a rivalry, and the better the cooperation the better the results.

Misconceptions are common on both sides, mostly because, in the past, the relationship was transactional. The fleet department would develop the parameters for the request for proposal (RFP), while procurement would negotiate the contracts. Once the contracts were signed, there would be little to no follow up until the next time an RFP was required. This cycle would continue every three to five years. In the intervening years there would be inevitable change in personnel. As such, the relationship between the two organizations would need to be rebuilt as part of the RFP process, adding an additional time-consuming element to an already time-consuming process.

Over 30 years ago, clothing retailers pioneered a new kind of procurement practice known as Category Management. This has become popular among other industries within the last 10 years and we now see a fleet category emerge. While it may be a standalone role for some fleets, it may also be bundled with other similar categories. With Category Management, the procurement organization establishes relationships with suppliers. This allows the company to engage with their suppliers throughout the lifetime of the contract, and offers the procurement category manager the ability to monitor the results along the way, and not just at the end of the contract during the next RFP.

In order to do this properly, the organization must recognize that procurement is not replacing fleet, but augmenting fleet.

While procurement partners with fleet in the ongoing supplier relationship management, fleet continues to tactically manage the operations, providing necessary feedback when changes are needed.

It is imperative that the fleet manager maintains a good relationship with the procurement department and vice-versa. Again, this is a partnership, not a rivalry. That might require establishing a formal responsibilities chart. This means that there are aspects of the fleet program that will primarily be the responsibility of the fleet manager and some aspects will be led by procurement, but when it is necessary, the two will come together with their expertise to achieve the best results.

In the end, communication between the two departments is crucial. Proving that the relationship offers efficiency, flexibility, and savings above what would be achieved alone, further establishes fleet and procurement as collaborators, not competitors.

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