Drilling into Fleet Costs can Yield a Well of Financial Success

As your business needs change, so should your fleet focus. This type of due diligence can slip out of reach, however, as meeting client demands and every day work expectations become priority. Looking past today is critical to avoid compromising your business services, otherwise costs and downtime can pile up and become difficult to tackle in the future.

What could you accomplish with a fleet that is more efficient, more affordable and still able to meet the needs of your customer? I’d like to share a real-world example that demonstrates the possibilities.

 

Drowning in Expenses

An ARI client in the water management industry was becoming bogged down vehicle expenses. Their 1,800 vehicles—ranging from small vehicles to medium and heavy-duty trucks with upfitting—were not driving the amount of profit they needed for financial success. With a corporate sourcing initiative calling for cost optimization within the current fiscal year, they needed a new approach, fast.

We set to work identifying possible savings, conducting a full fleet assessment to find any and all opportunities for change.

Draining Unnecessary Costs

We needed to act aggressively to meet the needs of this client, as time was of the essence. Once we got our results and met with stakeholders, we moved forward with the goals of:

-Increasing fuel efficiency

-Decreasing maintenance costs

-Eliminating underutilized vehicles for good

First, we remarketed the vehicles that were not serving enough of a purpose to be valuable to create profit right away. From there we revisited the client’s annual replacement strategy, replacing 25 percent of their fleet right away and doubling the annual replacements for the fleet across the board.

We were also able to determine that the client could service their customers just as effectively with smaller vehicles. This reduced acquisition costs upfront and maintenance costs down the line, and the client was able to operate a more fuel efficient and environmentally friendly fleet, which made their customers happy.

 

A New Tide

Since making these changes, the client measured more than $1.5 million in savings across the entire fleet. That number will only grow, as they are now operating a newer and more fuel efficient fleet. And since they doubled the number of annual vehicle replacements, the fleet will stay younger and require less maintenance, leading to less downtime. The client and their senior leadership team have worked with us continuously to contribute more to this project, and the client continues to see a positive return on their investment.

Considering evolving your approach to spec’ing and replacing vehicles to improve both your asset and operating costs? Download our whitepaper on maximizing your fleet supply chain.

Au fur et à mesure que les besoins de votre compagnie évoluent, les objectifs de votre parc doivent les suivre. Ce type de diligence raisonnable peut, cependant, être hors de portée lorsque le fait de répondre aux demandes des clients ainsi qu’aux attentes du travail de tous les jours devient une priorité. Regarder au-delà d’aujourd’hui est essentiel pour éviter de compromettre les services de votre compagnie, faute de quoi les coûts et les temps d’arrêt peuvent s’accumuler et devenir difficiles à gérer à l’avenir.

Que pourriez-vous accomplir avec un parc plus efficace, plus abordable et toujours en mesure de répondre aux besoins de vos clients? J’aimerais vous donner un exemple concret illustrant les possibilités.

 

Se noyer dans les dépenses

Un client d’ARI de l’industrie de la gestion de l’eau commençait à s’embourber dans les dépenses des véhicules. Leurs 1 800 véhicules, allant de petits véhicules à des camions moyens et lourds aménagés, ne généraient pas les profits dont ils avaient besoin pour réussir sur le plan financier. Dans le cadre d’une source financière corporative demandant à ce qu’ils optimisent les coûts au cours de l’exercice financier courant, il devait adopter rapidement une nouvelle approche.

Nous nous sommes mis au travail pour identifier les économies possibles en procédant à une évaluation complète du parc, afin de trouver toutes les possibilités de changement.As your business needs change, so should your fleet focus. This type of due diligence can slip out of reach, however, as meeting client demands and every day work expectations become priority. Looking past today is critical to avoid compromising your business services, otherwise costs and downtime can pile up and become difficult to tackle in the future.

What could you accomplish with a fleet that is more efficient, more affordable and still able to meet the needs of your customer? I’d like to share a real-world example that demonstrates the possibilities.

 

Drowning in Expenses

An ARI client in the water management industry was becoming bogged down vehicle expenses. Their 1,800 vehicles—ranging from small vehicles to medium and heavy-duty trucks with upfitting—were not driving the amount of profit they needed for financial success. With a corporate sourcing initiative calling for cost optimization within the current fiscal year, they needed a new approach, fast.

We set to work identifying possible savings, conducting a full fleet assessment to find any and all opportunities for change.

Drainage des coûts inutiles

Nous devions agir de manière agressive pour répondre aux besoins de ce client, car le temps était compté. Une fois les résultats obtenus et les intervenants rencontrés, nous sommes allés de l’avant avec les objectifs suivants:

– Améliorer la consommation de carburant

– Réduire les coûts d’entretien

– Éliminer définitivement les véhicules sous-utilisés

Premièrement, nous avons vendu les véhicules qui ne servaient pas suffisamment pour avoir la possibilité de générer immédiatement des profits. À partir de là, nous avons réexaminé la stratégie de remplacement annuelle du client, en remplaçant immédiatement 25% de son parc et en doublant les remplacements annuels du parc.

Nous avons également pu déterminer que le client pouvait servir ses clients tout aussi efficacement avec des véhicules plus petits. Initialement, cela a permis de réduire les coûts d’acquisition et les coûts d’entretien sur toute la ligne, et le client a pu exploiter un parc plus économe en carburant et respectueux de l’environnement, ce qui a rendu ses clients heureux.

Une nouvelle vague

Depuis ces changements, le client a réalisé des économies de plus de 1,5 million de dollars sur l’ensemble du parc. Ce nombre ne fera qu’augmenter, car ils exploitent maintenant un parc de véhicules plus récent et plus économe en carburant. Et puisqu’ils ont doublé le nombre annuel de remplacement de véhicules, le parc restera plus jeune et nécessitera moins d’entretien, ce qui réduira les temps d’arrêt. Le client et son équipe de la haute direction ont travaillé avec nous de façon continue pour contribuer davantage à ce projet, et le client continue de voir un retour sur investissement positif.

Vous envisagez de faire évoluer votre approche en matière de spécification et de remplacement de véhicules pour améliorer à la fois vos actifs et vos coûts d’exploitation? Téléchargez notre livre blanc sur maximiser la chaîne d’approvisionnement de votre parc.Draining Unnecessary Costs

We needed to act aggressively to meet the needs of this client, as time was of the essence. Once we got our results and met with stakeholders, we moved forward with the goals of:

-Increasing fuel efficiency

-Decreasing maintenance costs

-Eliminating underutilized vehicles for good

First, we remarketed the vehicles that were not serving enough of a purpose to be valuable to create profit right away. From there we revisited the client’s annual replacement strategy, replacing 25 percent of their fleet right away and doubling the annual replacements for the fleet across the board.

We were also able to determine that the client could service their customers just as effectively with smaller vehicles. This reduced acquisition costs upfront and maintenance costs down the line, and the client was able to operate a more fuel efficient and environmentally friendly fleet, which made their customers happy.

 

A New Tide

Since making these changes, the client measured more than $1.5 million in savings across the entire fleet. That number will only grow, as they are now operating a newer and more fuel efficient fleet. And since they doubled the number of annual vehicle replacements, the fleet will stay younger and require less maintenance, leading to less downtime. The client and their senior leadership team have worked with us continuously to contribute more to this project, and the client continues to see a positive return on their investment.

Considering evolving your approach to spec’ing and replacing vehicles to improve both your asset and operating costs? Download our whitepaper on maximizing your fleet supply chain.