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Procurement Tips for Fleet Management

November 15, 2018

Procurement Tips for Fleet Management

November 15, 2018

A recent article by Fleet Financial focuses on helpful tips for procurement managers involved in fleet management.

One of the main things that Fleet Financial's "How to Reduce Costs and Maintain an Efficient Fleet" article points out is that fleet procurement and fleet management's goals must harmonize in order to have a truly efficient fleet. As the article explains, "Fleet managers tend to think in terms of the total cost of ownership for a vehicle, which may be at odds with a procurement executive who may just want the best price to lower acquisition costs." These contradicting goals need to be addressed in order for a fleet to effectively run.

A big takeaway from Fleet Financial's post is that fleet managers can be an asset to procurement executives as long as communication is open and consistent between the two parties. Fleet managers tend to have a "long-term view of the asset life or lease life" of a vehicle, which means that when they're considering a piece of equipment or a vehicle purchase, they prioritize total cost over its complete lifecycle. This is a skill that could be utilized by procurement managers to make their purchases be more adequate in the long run.

Barbara Banas, senior director of procurement for Wheels, Inc., stated that this long-term approach to fleet management "provides the company with the most comprehensive and complete analysis."

In order to implement such an approach, Fleet Financial advises that procurement executives do the following:

  1. Understand how the asset will be used
  2. Get up to speed
  3. Manage supply chain relationships
  4. Prioritize the fleet manager relationship and communicate

Understanding an asset's functions, an asset's lifecycle, and their drivers' needs are crucial. Without a true comprehension of assets' lifespan, procurement specialists won't be able to accurately evaluate when a cheaper equipment option would actually be detrimental to fleet operations in the long-term. They also would have difficulty predicting when an initially costly piece of equipment would be more valuable in the long run than its cheaper counterparts.

Getting up to speed in regards to industry information and trends is equally important. Fleet Financial reports that "procurement managers should seek out resources such as industry trade publications and events from established associations and trade publishers." Attending industry conferences is also important, because it allows attendees to meet key industry players and suppliers.

Managing supply chain relationships is vital for procurement fleet managers. By maintaining these relationships, procurement specialists can stay up to date with technological advancements, equipment updates, and overall industry knowledge. Fleet Financial advises that vendors be scored regularly against KPIs and in quarterly business reviews. Keeping in contact with suppliers will "keep vendors in check and ensure they are understanding of expectations."

Finally, prioritizing fleet manager relations is paramount in effective fleet management. Fleet Financial explains, "Procurement managers must work closely with their fleet manager to ensure they understand what drivers and the fleet vehicles need, details about budgets, and financing considerations for short- and long-term business plans." Fleet managers can also be very helpful in successfully completing the other steps listed in this article. Their work and experience make them an asset in vehicle operations and industry trends.

By implementing these practical steps into the procurement cycle, fleets will be better equipped for long-term success and efficiency.

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