6 Strategies to Cut Your Fleet Management Costs Right Now
As fuel costs rise and the economy continues to stumble, managing a fleet becomes more difficult. Many businesses must now operate with a reduced fleet management budget, and many need to find creative ways to be profitable and ensure the long-term health of the operation. With that in mind, we consider six strategies that have helped achieve that success.
1. Find Inefficiencies in Actual Costs
Budget reduction does not necessarily require sacrifice. Before looking at where the company can make cuts, analyse the actual costs of internal processes and resources. These areas can at times offer huge opportunities for cash savings especially when all options (including outsourcing) are considered.
2. Optimize the Vehicle Inventory
Vehicle inventory is where a great deal of waste occurs in fleet management. Many managers are reticent to lose a current vehicle due to some potential future value it may have, but if liquidated, it is an asset that the company can use and profit from now. So challenge all vehicles in the fleet, and cut any that aren’t pulling their weight.
3. Reduce the Parts Inventory
An onsite parts inventory is an out-dated concept due the accessibility of same-day parts delivery. In most cases fleet managers should not hold onto parts. In cases where its unavoidable, you should only stock the parts and supplies that they are guaranteed to be used regularly.
4. Automated systems
Many fleets can reduce costs by transitioning to a software system and/or a vendor who offers a fleet related reporting system. Companies without these measures usually process areas like servicing and expenses slowly and can also miss repairs for which they are covered. A software system will automatically flag covered repairs and even alert drivers and fleet managers to upcoming vehicle and fleet needs.
5. Adjust Mileage Reimbursement
Avoid losses by having the fleet department process reimbursement claims first rather than passing them directly to the finance department. The manager should also look closely at reimbursements for personally owned vehicles, a cost that can often be offset by using the fleet more efficiently.
6. Manage Demand
An often overlooked way to reduced fleet costs is to reduce fleet demand. A fleet often provides services that cannot be profitable. These services cannot continue as is. The fleet must stop providing them or reconfigure them so that they do turn a profit. For in-house requirements, the company or vendor must find a way to achieve the goal so that it does not come at the expense of the fleet management department.
Find out how Fleetcare’s fully outsourced fleet management solution can help cut even more costs from your vehicle fleet budget with a tailored solution to suit your business, today.
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