Fleet News

Procurement: Buyers must look at the real costs

The demise of the full-time, professional and experienced fleet manager over the past 20 years or more is one that businesses, if they truly analyse the cost of fleet operations, will regret.

Fleet is typically a company’s biggest expense after salaries so it pays to employ a hugely knowledgeable manager to oversee the operation and ensure the process of buying vehicles, fleet services and related products is run along best practice lines.

Too often today, purchasing is exclusively in the hands of procurement managers and their teams and they can confuse value for money with price.

Instead, greater consideration should be given to intangibles such as value-added service delivery, account management and product innovation if a successful long-term business relationship with a supplier is to be formed.

Another key focus should be vehicle off-road time. Undoubtedly one of the biggest costs to companies, few businesses – except those with full-time professional fleet managers – have a handle on the impact.

Vehicles may be attractive to a procurement manager because they are cheap – but if they are frequently stuck on a garage ramp undergoing maintenance and not working for the business, operating costs soar.

I want to see fleet decision-makers – whether they come from a procurement, finance or HR background – take a leaf out of the books of professional fleet managers and focus on the ‘real’ cost of running a car or a van.

Key performance indicators must include vehicle off-road time because of the impact that will have on business operations – service and costs – whether a parcel delivery company or a customer-focused service operation such as undertaking boiler maintenance in homes.

Many suppliers will lay claim to having a 24/7 helpline, but is it simply a call answering service? Fleet chiefs should be demanding one staffed by real people who will pro-actively take immediate action and ‘own the job’.

This would minimise cost as much as possible and ensure vehicles are on the road working.

By Geoffrey Bray executive chairman, Fleet Service Great Britain

Click here for fleet procurement best practice and procurement insight

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