International or Domestic Efficiency of Fleet Considered from Ikhwan Rosli's Point of View
BP's Hybrid Fleet Strategy: Balancing Global and Local Approaches
BP, a global energy company, has developed a unique fleet strategy that combines international oversight with local execution. This approach offers several benefits, including improved cost management, streamlined decision-making, and consistent standards across regions, while also enabling adaptability to local conditions.
At the heart of BP's fleet strategy is a meticulous process of understanding data, assessing the market, and grasping controls and benefits before deciding on an international or local approach. The balance between these strategies is under constant scrutiny, with BP carefully considering risks and opportunities.
Centralizing a fleet strategy, as demonstrated by BP's approach, offers significant benefits. For instance, cost control and efficiency are achieved through unified policies and cost tracking, helping to avoid duplicated roles or expenses. Central management of fleet strategy also ensures standardized processes for vehicle acquisition, maintenance, fuel purchasing, and compliance monitoring, fostering uniform quality and safety.
Moreover, central teams can analyse comprehensive fleet data from all locations to optimise routes, maintenance schedules, and fuel usage. This data-driven decision-making is crucial in today's dynamic business environment.
However, this centralised approach faces challenges. Balancing global control with local flexibility is essential to adapt to local market conditions, regulations, and operational needs. Managing complexity across diverse regulatory environments is another challenge, as is avoiding duplication of efforts.
BP operates a global fleet of 6,000 vehicles, primarily used for business purposes. The vehicles are managed under a hybrid model that balances 85% global and 15% local strategies. This balance allows BP to leverage relationships with preferred partners, optimise operational efficiency, and realise cost savings.
Governance structures, service level agreements (SLAs), and key performance indicators (KPIs) are essential for BP at both local and global levels. Local entitlements and budgets play a significant role in BP's fleet operations.
BP's approach to fleet management is not without controversy. Ikhwan Rosli, Global Category Manager at BP, has highlighted the risks of over-standardization in an international fleet strategy. Challenges in over-standardization include resistance to change, varying supplier performances across regions, communication barriers, and limitations in certain global regions.
The efficiency of an international fleet approach compared to a local one is a topic of ongoing discussion. Ted Chan, from Schindler, and Marc Sibbald, from IPWEA, have both discussed the viability of flexible pricing for fleet operations and the anticipation of specific and flexible fleet funding methods like subscription, novated lease, or private lease.
Another important issue is road safety, particularly in countries with a low road safety culture. Carlos Roberto Guemez Shedden, from UNHCR, has addressed how tracking data can support in reducing road crashes.
Technological advancements also play a role in BP's fleet management. Almy Magalhaes, from Ecolab, has discussed the benefits of AI and ML for commercial fleets. Centralization of 85% of BP's fleet data has been beneficial for generating comprehensive insights, centralizing data has facilitated agility, minimised resource allocation, and enhanced standardization across multiple facets.
In conclusion, BP's international and local fleet strategy reflects a hybrid model where centralization delivers cost savings, standardization, and strategic oversight, whereas local implementation ensures operational flexibility to meet specific market demands and regulatory environments. This balance is crucial to successfully managing global fleets.
In the application of BP's fleet management strategy, technology plays a significant role in centralizing 85% of the fleet data for generating comprehensive insights, Agility, and enhancing standardization across various aspects.
Moreover, understanding the intricacies of both finance and technology is essential for BP to leverage relationships with preferred partners, optimize operational efficiency, and achieve cost savings within their global business operations.
