Suppliers are playing a much bigger part in fleet management with more companies outsourcing aspects of fleet management or, in some cases, the entire fleet function.
At the September Fleet200 Executive Club meeting, attendees discussed how they choose the right supplier and how they manage supplier relationships.
Summary of discussion points:
- To find the right supplier, fleet managers need to work with other stakeholders within the business, such as HR and procurement.
- Some fleet managers have had bad experiences when external procurement companies have chosen suppliers without enough involvement from the fleet team.
- Tender documents shouldn’t simply ask a leasing or fleet management company to suggest consultancy ideas without first providing some detail on the current fleet and how it is run.
- Some fleet managers favour long contracts/supplier relationships (five years or more) but they recognise that this brings challenges as the supplier can become complacent and it can be difficult to switch to a new provider and start a new partnership.
When leasing, fleet managers have to juggle multiple relationships – the leasing company, the dealer, the driver and if they are in the public sector, procurement organisations such as Crown Commercial Service.
Some fleet managers have sourced better deals themselves outside of their agreement with their fleet management company. For instance, one was able to reach an agreement with a livery supplier for far less than the fleet management company was suggesting.
One fleet manager actively sources deals from a number of suppliers as he doesn’t want an ‘all eggs in one basket’ approach as he doesn’t feel he gets the best deal that way.
Fleet managers want consistency from suppliers and one bugbear is when account managers change. One fleet manager has had four different account managers.
Fleet managers recognise that once a contract has been signed they need to collaborate and build a partnership with the provider. One company has appointed a supplier relationship manager to do just that.
- A good leasing/fleet management company should challenge a company about the way they do things and suggest improvements.
- Regular service review meetings, KPIs and SLAs are all important ways to manage the supplier relationship.
- At the end of contracts fleet manager are likely to look at alternatives. For instance, whether it is better to move from a fleet management company to a leasing company who offers similar services.