MAXIMIZING YOUR PROFITS IS NO EASY FEAT. One of the most crucial aspects of success for any fleet company is optimizing fleet costs. If your fleet costs start spiraling out of control, it can have a detrimental impact on your bottom line. At this point, you probably already know this and are thinking how much of a headache managing your fleet expenses is. You have a plethora of spreadsheets with fluctuating costs and hard-to-read data. Chances are you’re missing the main areas of deficiencies within your fleet and important trends you need to notice.
There are ways you can optimize fleet costs. You may already have some of these in place within your company. Keep this in mind while you’re reading through, you may be able to refine the processes you already have in place.
OPTIMIZING FLEET COSTS KNOW YOUR COST Having a thorough understanding of the fleet’s total cost of ownership (TCO) is crucial to ensuring your fleet remains profitable. This is definitely challenging however, understanding your fleet’s TCO will enable you to make decisions based on accurate data, which will serve to better manage your fleet.
To optimize fleet costs, you need to analyze your fixed and variable costs.
Examples of fixed costs include: Loan and Lease Payments Licenses and permits Taxes Loan and Lease Payments
Examples of variable costs include: Fuel Maintenance/Repair Part Replacement Tolls
There are many different software platforms that will help optimize fleet costs. Certain platforms provide advanced custom reporting which will allow you to easily determine what you’re spending and where, effectively giving you more control over your money. Having this insight enables you to accurately track your assets and put in place preventative maintenance tasks, which can help your variable costs long-term.
THE NUMBER ONE MONEY DRAIN – FUEL Beyond a shadow of a doubt, fuel is by far the largest recurring expense for fleets. You can’t control how much fuel costs or how much fuel is needed to get from point a to point b. However, you can reduce and somewhat manage how much you’re spending to optimize fleet costs.
Ensure you have a system in place that is monitoring the cost and consumption of your fleets. This is crucial to ensuring the variable cost of fuel remains low. By tracking fuel consumption, you’ll be able to chart out possible fuel costs and create an accurate forecast of fuel expenses.
Going back to fleet management software, using this to help track your fuel costs will save you time. Manually entering receipts into a spreadsheet is a time waster and doesn’t need to happen. Plus, fleet management software will enable you to accurately monitor trends and compare mileage between your fleet vehicles.
HAVE A FLEET MAINTENANCE PLAN Are you proactive or reactive with preventative maintenance on your fleet? While situations can arise where you need to conduct unplanned maintenance, these can be more frequent should you not be properly maintaining your fleet. This can lead to increased downtime and expenses if you’re not being proactive.
Putting a preventative maintenance plan in place ensures you’re optimizing fleet costs. By staying on top of regular servicing, part replacement, and oil changes, you’re setting your fleet up for financial success. Keep track of all the maintenance you conduct and do a comparison during a time where you didn’t have a plan in place. You will notice you are optimizing fleet costs just by maintaining your fleet properly.
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HOW MANY PARTS DO YOU HAVE LYING AROUND? Parts as a whole can cover over a third of vehicle maintenance costs. Having an inventory management system in place that is effective and works for you can be a huge factor in optimizing fleet costs. Having a system in place will help with the balancing act between keeping enough inventory in-house and purchasing unnecessary parts.
You need to ensure the parts you’re purchasing are correct and what you need to keep up with your maintenance. Purchasing surplus stock not only burns a whole in your pocket but takes up space. Take a look at how many spare parts you have, do a cost analysis, and find out how much money you’ve spent.
Keeping track of your inventory quantities and spending is crucial to optimizing fleet costs.
Do frequent inventory checks to make sure you’re staying on top of the growing cost of inventory.
The main takeaways here are to keep a close eye on the money leaving your fleet and have a process in place that will help manage your fleet costs. Between fleet management systems and inventory tracking systems, there are many ways you can be optimizing fleet costs. It all starts with being organized, tracking everything accurately, and having an effective plan.