Managing non-compliance to lower TCO
The role of a fleet manager is a very important one – albeit time consuming. With so many day-to-day tasks, it can be easy to get lost in the details of managing a fleet and lose sight of the bigger picture.
Although there are numerous facets to fleet management, the ultimate goal for all fleets is to get the total cost of ownership (TCO) as low as possible. When managing TCO, the basic components and related costs are quite transparent. Fuel, depreciation, insurance, maintenance and repair, accident expenses, fees, taxes and interest all must be considered when evaluating your fleet.
We look to best manage these cost components by selecting the "right" vehicle, implementing the optimum replacement criteria, managing the costs associated with fuel, accidents, safety, registration and developing a car policy that defines the driver's responsibility, compliance and related penalties.
While many of the basic items listed above tend to steal the management spotlight, non-compliance issues can greatly increase your TCO if not managed properly.
Let me illustrate. Below are a few basic categories a fleet can manage to curb non-compliance:
- Using Tier 1 Fuel Retailers – Purchasing from a tier 1 fuel supplier can cost you more more per gallon than tier 2 or 3. While a few cents more at the pump may not seem like much on a small scale, multiply it by your entire fleet and suddenly you have a large opportunity for cost savings simply by making drivers aware.
- Exceeding Fuel Tank Capacity – When drivers with a tank capacity of 18 gallons purchases 25 gallons of fuel, we know something is wrong. A best-in-class fleet will monitor spend, spot these inconsistencies, discover what happened and work with drivers to correct the behavior.
- Non-Fuel Transactions – Drivers purchasing non-fuel items at the gas station adds unnecessary cost to you, but how can you tell when it's happening? You'll need to drill down to the details to catch those items that the company has not approved for purchase.
- Number of Incidents – Do you have some drivers that seem to always be having roadway incidents? Analyzing the data and trends is critical. So is knowing what measures to take to prevent accidents in the first place.
- Overdue Preventative Maintenance Avoidance – Preventative maintenance can save a fleet big money over time. Drivers who neglect regular maintenance end up costing you more as a result. It's good practice to identify when this happens, communicate the expected behavior, and follow up to assure the service is performed.
- National Account Usage – Utilizing national accounts can save your fleet significant money over time as we are constantly negotiating costs with them on your behalf.
License & Title:
- Registration Violation Avoidance – The cost of registration violations is one that adds unnecessary cost to your fleet. With proper management, these fees can be eliminated from your fleet entirely, saving you money.
You may be thinking – now just how on earth can one person get all this done? And this is just a small piece of your job! At LeasePlan, we recognize the many responsibilities weighing on fleet managers and want to provide resources to help.
MyFleetResource – a program that enables you to extend your fleet department to LeasePlan – gives you the ability to unload some of the most time-consuming tasks that affect your TCO. The experts manage them for you. From basic administrative tasks to managing non-compliance, our team frees up the fleet manager to focus on big-ticket items instead of getting lost in the weeds.
The key to management of these items is devoting valuable time and resources to monitoring and then informing the fleets of these behaviors. For example, when your driver consistently uses the fuel station that averages 10 cents higher than the one across the street, our team notices that and reaches out to the driver. Through this custom program, we ensure that the behavior isn't just noticed on our end, but changed at the driver level.
When non-compliance is managed properly, fleets can save significantly. On average, a fleet of 1,000 vehicles experiences a conservative net savings of $550,000 after only three years of utilizing MyFleetResource. Better yet, using our team of experts frees you up to focus on other strategic issues and planning within your fleet to maintain maximum efficiency.
With a renewed focus on non-compliance, your fleet can maximize efficiency and realize significant savings. If you have any questions about this, or are interested in enrolling in the MyFleetResource program to have our team manage these items for you, please reach out to us at any time.