Fleet cost reduction for the long haul
Posted: 24/06/2011 By:
Rory Deegan - Online Marketing Coordinator
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In a perfect world, goods and services would be bought or sold with scant regard for costs and people could glory in the comfort of purchases and consumption. Unfortuantely we do not live in that world. With Greece in crisis, the US broke and the global economy still a little bruised, “Austerity measures” has transformed the way we think about cost control. With these trends and the new culture of business cutbacks in mind we thought we would outline some of the best long term cost control measures available to fleet managers.
Explaining to the boss that “you have to spend money to make money” can be a real challenge, you need to take the time to cost up projects with an acute emphasis on “whole of life” budgeting. Changing a company’s culture in this area is always a challenge as cost control ideas can sometimes be met with stiff opposition.
Before you start
Make sure you plan out the events and potential impacts of any project.
Make sure you have considered all costs and make sure that the margin for error on these costings is minimal.
Make sure that you have buy-in from senior stakeholders and management.
There are four main areas to consider when examining and executing long term fleet cost reduction.
Maintenance and parts management
Outsourcing some or all practical fleet management activities can offer fleet managers bigger discounts on maintenance and repairs. Outsourcing can also free up a great deal of time to allow you to focus on more long term activities.
Onsite oil and filter changes should be bought with “whole of life” considerations. Decisions on these items should not be based on their once off cost.
Tyre selection, roll resistance and pressure checks. Poor or mismatched tyres can and will increase fuel consumption.
Reporting and budgeting
Estimating and forecasting for “payback dates”
Without realistic projections of return of investment you will fail to convince even your own inner sceptic, never mind the scepticism of the person signing the cheques.
Inspections; without inspections minor costs may become major costs with tow trucks, insurance excess payments and compensation findings their way into your costs
Efficiency inspections will also need to be conducted to route out costly driving techniques which wear down tyres or put too much pressure on the vehicles parts, fuel or lubricants.
Use software packages to track and record the following;
Vehicle routes and vehicle tracking
Fuel usage and fuel purchases
Maintenance costs and trends
Training and Reinforcing
- Eco-Driving Training for drivers. Training of this sort can represent serious value for money if enough ideas are transferred to drivers.
- Collision Reduction Training. Like eco-driving training this can be a large investment, so the advice here would be to research the training companies comprehensively.
- Vehicle training. Ensure drivers are fully aware of the settings, guidelines and manuals of their vehicles.
- Knowing the different set ups between vehicles can, at times, make very a significant difference.
- Keep drivers up to date and informed with helpful fuel saving tips (emails and notice boards can help keep the message alive).
- Reward good behaviour and question costly behaviour. This is required to encourage drivers to continually drive down the cost of their vehicle travel.
Continuous assessment of vehicle selection criteria.
Communal access to vehicle manufacturer’s guidelines and manuals.
Real filing and management systems dedicated to fleet costings. Having information in disorganised folders and binders can seriously stifle your work flow.
Like with most business functions the best advice is usually the simplest; keeping up to date with industry news, manufacturing trends and cost saving tips will always help you stay ahead of the pack. Once you can apply the new ideas coming from the outside with your own understanding of your fleet, you are on the way to really creating top quality cost saving techniques and systems.