For Illinois Tools Works, the time has come to create new policies to manage its robust global fleet.
Previously, auto fleets were handled at the local level with some 800 different teams, business units and divisions around the world managing automotive matters. Last year, Illinois Tool Works decided to begin handling fleet management from its strategic sourcing offices at its Glenview, Ill., corporate headquarters for better efficiencies, savings and fleet operations.
In fall 2013, it finalized new rules for its North American fleet and it is now in the process of doing the same for the ITW fleet in the United Kingdom. After that, it will then create auto fleet policies for France, Belgium and Germany, followed by other regions.
“Last year, we put a company car policy in place for the first time that our business units must adhere to,” says Keith Scolan, global fleet manager. “It was really the first true [fleet] policy for us.”
ITW’s global fleet of 10,000 vehicles includes everything from sedans to cargo vans and heavy-duty 18-wheel trucks and trailers. They are driven by sales staff as well as technicians, executives and employees in various posts across the organization. The fleet includes approximately 4,000 automobiles in North America, as well as 5,000 in Europe and the remainder in Australia, New Zealand, Brazil, Asia and elsewhere.
Founded in 1912, ITW employs 51,000 people in 56 countries who manufacture construction materials, welding equipment and auto parts, among other industrial, electronics, food and consumer durables businesses. The conglomerate aims to reduce its 800 business units to approximately 150 by 2017. The plan to centralize auto fleet management is part and parcel of the company’s larger internal reconfigurations.
ITW is a Fortune 200 global diversified industrial manufacturer of value-added consumables and specialty equipment, with related service businesses. It focuses on solid growth, improving profitability and strong returns across its worldwide platforms and businesses. These businesses serve local customers and markets around the globe, with a significant presence in developed as well as emerging markets, the company says.
Streamlining Fleet Management
Scolan’s ITW supply chain team is also streamlining fleet operations with better software to help manage the massive fleet management upgrade.
“We’re using the lease companies software and one other supplier of ours to consolidate the data,” Scolan explains. “The suppliers’ software helps us maintain our fleet data globally.”
The new fleet management policies are localized to specific regions so it is important for the team to understand market conditions in each region. For example, in some countries, company cars typically are included with compensation packages. In these nations, the total number of company cars might outnumber privately owned vehicles on the roads at any given time, and it is not unusual for new employees to negotiate their vehicles or even quit over automobile assignments. In Europe, CO2 emission taxes are also a major factor for fleet managers to consider while ensuring the company improves the environment.
ITW generally works with LeasePlan Corp., ALD Automotive and Donlen Corp. for its auto leasing. With so many different teams spread around the world, however, simply securing all the needed auto fleet data is sometimes a challenge, Scolan relates. Leasing norms differ in the United States and Canada compared to the E.U., with open-ended leases common in North American and closed-end leases typical in Europe.
Reducing its number of suppliers improves pricing and consolidates efficiency for ITW, Scolan says. Passenger vehicles are generally switched out between 36 and 48 months with the autos returned at the proper time to avoid fees. Mileage limits for passenger vehicles might be 60,000 to 75,000 miles.
Another difference between the E.U. and U.S. fleet are the popular auto manufacturing brands suitable to road conditions for optimal local quality, fuel efficiency and regulatory compliance. In the E.U., it is more typical for companies to lease Audi, BMW and Volkswagen vehicles than it would be North America, Scolan explains.
ITW’s Fleet Services is not just focused on managing auto leases, however. It also believes in educating drivers about the proper uses of company vehicles including safe driving and accident management training. It also teaches drivers not to idle their autos and waste fuel, which is especially pricey overseas.
“We are doing our part to help make sure drivers are safe and well aware of what they should and should not do behind the wheel of a company car,” Scolan says.