When it comes to managing your fleet vehicles, do you sometimes feel like you're just getting by? Or are you managing it like a pro? Either way, it's a difficult job. And one that's even harder to master, especially when it comes to finding ways to cut costs.

Throughout my 13 years in the fleet industry, I've seen a lot of untapped potential when it comes to cost savings. But that's the beauty of fleet management. There's always a skilled fleet professional willing to help you so you don't have to be(come) the expert.

Let me give you a real-life example. Recently, I was working with a client who was trying to get their arms around the true cost of operating their fleet. Human resources was managing the MVR process, the safety department was overseeing their telematics initiative, and accounting was managing tolls and violations expenses. Lacking the proper interdepartmental communication, this set-up led to inefficiency and confusion.

We worked with this client to facilitate a discussion between these departments so the fleet manager and the organization could take a holistic approach to these costs and create efficiencies around existing processes. Often, we focus on the big-ticket items like maintenance and fuel spend but forget about the smaller expenses that can greatly impact the company's bottom line.

While there are many areas to look at, here are the top 5 areas that I like to focus on with my clients:

  1. Lifecycle Cost Analysis (LCCA) & Total Cost of Ownership (TCO) – Do you ever think, "Am I operating the right vehicles?" or "Do the vehicles we provide meet the requirements of the job?" You can start by running an LCCA to compare vehicles and decide which makes and models are the best options for your fleet. I also like to look at all the areas of TCO – fuel, maintenance, depreciation, accident expenses, insurance, fees, taxes and interest. It’s a way for me to bring the data to life for clients and easily show how the fleet is impacting their company's budgets. This results in either validating their fleet choices or uncovering opportunities for improvement.
  2. Optimal Replacement While most companies traditionally have had a replacement policy of months and/or mileage parameters, with proper analytics and consulting, it is prudent to assess the entire fleet annually. This allows fleet managers to determine which vehicles are best suited for replacement and when to do so at the individual vehicle level. Considering the strong used-vehicle economy we have had since the 2008/2009 financial crisis, many companies have short cycled their vehicles to pull equity from the fleet and acquire up-to-date models with better fuel economy and the latest safety features. This also provides information in advance to finance/treasury for proper budgeting and asset allocation.
  3. Cost Savings Initiatives – What existing programs have you analyzed lately? The programs you already use should be evaluated on a regular basis to make sure they are effective and a sound investment. Are you utilizing the programs and services to their full potential? Some questions to ask yourself are:
  • Do you have a program in place to capture tolls and violations data and spend with the means to collect from the drivers when appropriate?
  • How are you monitoring national account usage? Can you identify the drivers that are not compliant in this area?
  • Are you fully utilizing the reporting capabilities from your fleet partner OR are you creating reports internally that are not being action on? Have you asked your fleet partner if they can assist you with managing this process.
  • Have you considered moving low-mileage drivers to reimbursement? What determines a driver's eligibility for a company-provided vehicle?
  1. Data Management – As they say, "Fleet managers can't manage what they don't know." So, are you managing all the data available from your fleet partner? First you must determine your goals. Then, use the analysis of your data, along with consultation from your fleet partner, to take full advantage of the information.
  2. Strategic Planning – Having a planning calendar defined can help ensure you are being as proactive as possible. Take into consideration how long it takes to determine which units will be replaced, when cut-off dates are, manufacturer lead times and your own internal fiscal year/budget. Click here to see a rough sketch of an annual roadmap.

Here at LeasePlan, I am fortunate to have the backing of our Analytics, Consultancy and Transformation team (ACT), which supports client success through consultancy services like total cost of ownership. ACT works to identify your fleet needs, analyze your current performance and provide decision-making information to maximize your fleet's budget and your staff's time. We work closely with our consultants to review results and together develop a strategy appropriate to your fleet's overall goals. If you need help with your strategic fleet management, just reach out to me or any of the other experts at LeasePlan!


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