Benefits of strategic fleet management
The benefits of managing a fleet compared to ad hoc purchasing, selling and maintenance of vehicles include:
- When selecting vehicles, the whole-of-life costs are compared instead of just the purchase price. This can save the organisation money because a vehicle with a lower purchase price may cost more over its lifespan than a higher-priced vehicle. This process also involves analysing future estimated resale values (residuals), an important factor in the whole-of-life cost of a vehicle.
- Predictable vehicle replacement schedules are established which control costs by considering vehicle operating costs, reliability history and estimated resale value.
- Fleet managers can often negotiate discounts on purchase price e.g. by buying multiple vehicles at once as well as discounts on fuel, insurance, servicing and repairs.
- Analysis of fleet management activities of other organisations, local dealer targets and market fluctuations can help choose the best time to buy or sell a vehicle and the types of vehicle to purchase.
- In reviewing market fluctuations, the motor vehicle auction process used by VicFleet and Local Governments is a useful guide and auctions often provide better returns on sale than dealer trade-in prices.
- Fuel card information systems and other fleet records provide data for monitoring fuel consumption and vehicle performance enabling implementation of strategies to reduce fuel, maintenance, administration and other costs.
- Maintenance is scheduled which can increase the lifespan of vehicles and reduce the costs of unexpected downtime and breakdowns. Vehicles with service records also return a higher resale value.
- Strategies to minimise the impact of a fleet on the environment also have cost benefits e.g. selection of vehicles of the appropriate size and decreased fuel consumption.
- Strategies to improve safety can reduce insurance premiums, time taken off by injured employees and downtime of vehicles.
- Scheduled maintenance can mean less vehicle downtime for breakdowns or repairs.
- Registration procedures can be streamlined because fleet management systems identify when vehicles are due to be re-registered and multiple vehicles can be registered at once.
- Regular maintenance and efficient driving practices often increase the lifespan of vehicles so less time is spent replacing vehicles.
- Fleet management rules, policies and procedures increase efficiency.
- Predictable vehicle replacement schedules increase efficiency because notice can be given to dealers early when a vehicles is due to be replaced and delivery can be scheduled.
- Fuel cards decrease time needed for administration of fuel costs.
- Ongoing analysis, monitoring and record-keeping reduces time needed to research and gather information when selecting and replacing vehicles and reporting back to management.
Selection of vehicles suited to the organisation's needs
- When selecting vehicles, detailed comparisons are completed taking into account the organisation's needs including analysis of vehicle usage, safety, whole-of-life costs, estimated resale values, environmental impact, business plans and available resources. This means vehicles selected are more likely to be compatible with the organisation's business objectives and context.
Minimising environmental impact
- The impact of a fleet on the environment is minimised by strategies like training employees to use efficient driving techniques, reducing fuel consumption, selecting fuel-efficient vehicles, considering alternative fuels and maintaining vehicles.
- Vehicle selection usually involves analysis of vehicle safety ratings.
- Drivers are educated about safe driving via policies and procedures; driver's handbooks and instructions; and employee induction and training.
- Monitoring of maintenance records, repairs and vehicle performance can help to identify and reduce safety risks.
Easier to plan
- Tracking of estimated and actual residual values for vehicles can assist with fleet planning.
- The order and delivery process can be managed to ensure there is enough time to consider replacement options, place the order and for the new vehicle to be delivered by the replacement due date.
- Maintenance and servicing of vehicles is scheduled so replacement vehicles or alternative transport can be organised.
- Fleet management records enable regular monitoring and reporting.
- Checking processes ensure vehicles delivered match the original specification and order.
- Fuel cards and their associated information systems provide accountability for fuel usage and costs.
Organisation image and employee satisfaction
- Selection of appropriate vehicles can have a positive impact on driver satisfaction and the organisation's public image.
- A positive safety record can enhance the organisation's public image and boost employee morale.
Information about Whole-of-life cost calculations.
Supported by the Community Sector Investment Fund (external link - opens in a new window).