MERCURY | Fleet Management Consulting, Simplified ™
 

Mercury's Vehicle Allocation Methodology Saves State of California Over $60 Million

state of california Since his election in 2010, California Governor Jerry Brown has launched numerous initiatives in an effort to contend with the State’s immense annual budget deficits. One of these initiatives was aimed at reduction of the State’s massive fleet of 51,000 vehicles and pieces of equipment. The Governor directed State agencies to determine the purpose of, the necessity for, and the cost-effectiveness of each of the vehicles and equipment in their fleet in order to identify any non-essential and/or inefficient assets that could be relinquished. In February 2011, Mercury Associates was engaged to assist the State in this important undertaking to rightsize their fleet.

Prior to the expiration of its existing agreements with various vendors, the client engaged Mercury to assist with conducting a management review of its fleet operations to ensure that the size, composition, utilization, and replacement cycles of the fleet were optimized and that industry best practices were being followed. Following this review, Mercury would draft a new request for proposal for fleet services and evaluate the proposals received from fleet management companies.

Mercury Associates utilized a structured approach to conduct a fleet rightsizing study known as a Vehicle Allocation Methodology (VAM). This approach combines analysis of objective data (e.g., miles driven for vehicles or engine hours used for equipment) with subjective information provided by fleet users including days used per year, hours used per day, and criticality to essential mission activities. Subjective information is gathered through Web-based surveys completed by fleet users.

Mercury's eVAM vehicle allocation modeling software is then leveraged to analyze both the objective and subjective data. Mercury's eVAM solution is a comprehensive program that contains robust statistical analysis algorithms and the functionality to adjust for inconsistent survey responses from fleet users. This data analysis is followed by discussions with fleet users to: review preliminary recommendations, learn more about their operational imperatives and work methods, provide an opportunity to explain why particular assets are critical to their mission activities, and explore alternatives to the permanent assignment of fleet assets. In our experience, these discussions are a crucial part of the fleet rightsizing process to produce results that are balanced, equitable, and cost-effective while still enabling fleet users to do their jobs.

As a result of this study, Mercury recommended the elimination of 3,800 vehicles from the State’s fleet with a projected first-year cost savings of $11.4 million, as well as $5 million in potential auction revenue from the resale of vehicles. Savings over the subsequent five-year period is estimated at $57 million. The California VAM project is the largest government fleet rightsizing effort undertaken at the state or local level. Mercury Associates is proud to have played a role in this seminal project.

About Mercury Associates

Mercury Associates, Inc. is the largest independent fleet management consulting firm in North America. Founded in 2002, Mercury consultants have provided consulting services to more than 500 private and public-sector organizations, including Fortune 500 companies such as 3M, ARAMARK, Bell Canada, BNSF Railway, Genentech, GlaxoSmithKline, Laidlaw, and Sprint; U.S. federal government agencies including NASA, the General Services Administration, and the departments of Homeland Security, Interior, and State; 33 of the 50 largest cities in the U.S., including the 10 largest, and more than half the states. Mercury Associates is a U.S. Department of Defense and U.S. Small Business Administration certified small business enterprise. Headquartered in Gaithersburg, Md., Mercury Associates has consultants located throughout the U.S.

For more information on Mercury Associates' fleet consulting services, contact us via our online form, by email at , or by phone at 301.519.0535.

 

Want to Learn More?

For more information on Mercury Associates' fleet consulting services, contact us via our online form, by email at , or by phone at 301.519.0535.

Follow us on Facebook to receive notifications about new articles, seminars, workshops, and news:   

 

To learn more about industry-specific news, follow our company page on LinkedIn:

MERCURY | Fleet Management Consulting, Simplified ™