Whether you have undergone a merger or acquisition, are experiencing significant changes in company structure, or are constructing a fleet policy or management structure for the first time, it is important to consider how re-evaluating your fleet could lead to significant savings. At Source One Management Services, we assess every aspect of your Vehicle Fleet to find cost-savings not only in price per unit, but through contract negotiations that provide you with comprehensive services that satisfy the needs of your company. These contracts not only save money in the short-run, but ensure vehicle safety, efficiency, and maintenance, so your fleet investment doesn’t fade due to a shorter vehicle-shelf life than you had expected.
Before negotiating these contracts, however, there are important questions and considerations to think over when assessing your company’s fleet needs.
The first aspect of fleet to consider is your company’s vehicle make-up. Fleet is a large category, and it is important to consider the types of vehicles you are using for specific purposes. Are these vehicles similar? Are they stratified into distinct categories?
Depending on your company’s needs, it may be valuable to standardize your fleet. By standardizing your fleet, you may be able to find lower maintenance costs from limiting the variety of parts needed to repair or maintain vehicles. Standardizing your fleet also opens a door to more competitive contract pricing if your fleet volume is large enough.
The next aspect of the fleet process to consider is fleet leasing. Are you leasing from more than one company? Are there incentives to streamline your fleet dealer?
Although every company’s needs are different, it is important to consider how streamlining your fleet sources could create savings. At Source One, we can help consolidate fleet spending to cut costs by developing a supplier scorecard. These appraise your supplier's performance to ensure they are capable of meeting your needs. Contracting with one dealer in larger volumes creates opportunity for more cost-control and allows both you and the supplier to negotiate vehicles and services that match your company’s needs. Some of these negotiations could include establishing a consistent vehicle replacement schedule, receiving a retainer bonus, rebates through fuel card programs, loyalty incentives, or unit discounts. By limiting the number of dealers with whom you are contracting, you are typically able to purchase in larger volumes. This, in turn, leads to fewer contract negotiations and provides additional leverage for those negotiations that are necessary.
It is tempting to believe that all fuel programs have the same benefits. However, the type of vehicle fleet you are utilizing may determine the types of fuel services that suit your company’s needs. Here, we consider how your fleet’s fuel needs could be best accommodated.
Fuel cards are perhaps the most common fuel service provided by fleet dealers, and can allow drivers the flexibility to fill up when needed. For heavier-duty vehicles, however, looking for an OEM dealer that provides wet hosing services may be a more practical option. They eliminate the risk of fuel-card misuse and keep your company from paying retail price for fuel. Wet hosing services can also produce soft dollar savings by reducing the time it takes to fuel off-site vehicles.
Every supplier can provide something different. Sometimes it is easy to look at the baselines for all suppliers and assume their services are the same. Though cost per unit is important in terms of OEM fleet, it is often the additional administrative and maintenance services that make the biggest differences in both price and convenience.
Depending on the size of your fleet, perhaps it’s important to consider how services like vehicle inventory and managing replacement schedules may take a load off of your shoulders. If you are a larger firm, you may already be hiring third-party providers to manage these aspects of your supply chain. However, many OEC suppliers like Ford, GM, Nissan and Toyota offer onsite management services and telematics technologies that oversee pricing and administrative functions. This type of vehicle inventory monitoring can ensure that maintenance is taken care of in a timely fashion, and vehicle replacement is occurring when necessary. Cutting back on 3rd party fleet management services can cut internal costs and create a more streamlined approach to vehicle management.
Although this is only a sketch of things to consideration as you re-evaluate your fleet spending, a sourcing specialist at Source One can assist you with the ins and outs of picking the right supplier for your company’s needs.