Multi-Suppliers Is Future To Cost Effective Fleet
Fleet Operations Limited, the UK’s leading fleet management consultancy, says that efficient management of a range of fleet solutions suppliers is the secret to cutting costs and not reliance on sole supply arrangements.
Instead of customers relying on a single manufacturer, contract hire and leasing company or fleet management organisation to deliver a package of solutions, the company’s team of professional ‘supplier neutral’ consultants use their marketplace knowledge to choose a tailored selection from a cross-section of suppliers to meet individual fleet requirements. In this way managing director Ross Jackson calculates that savings of up to 10% over a three or four-year vehicle operating cycle are typical.
Mr Jackson explained: “Procurement departments are focused on minimising supplier numbers and our view flies in the face of procurement practice.
“However, the ongoing banking crisis has highlighted the disastrous consequences of organisations and individuals having all their assets in one place and fleet management is no different.
“Few corporate procurement departments understand the complexity and volatility of the fleet marketplace. That is because effective and efficient fleet management is not just about buying a product. It is about buying and delivering a range of inter-related services, effectively managing a wide range of drivers and policing policy.
“Additionally, suppliers must also be managed and that is why procurement specialists favour sole supply arrangements because that task is made easier. Sole supply might give perceived control but it costs money.”
But, with the corporate spotlight on saving money, including cutting fleet operating costs, Mr Jackson said: “Too often we find organisations accepting the status quo, but in reality loyalty to one company is costly both financially and in frequently failing to deliver best-in-class fleet products.
“On average we have identified and delivered cost savings of around 10% by questioning the logic of relying on a sole supplier for fleet management solutions.”
Historically, the delivery of a wide-range of fleet solutions by one supplier frequently made sense because internal resources were already limited, said Mr Jackson. However, in today’s recession-driven world, while internal fleet management resources remain stretched the long-term viability of some fleet suppliers is questionable.
He said: “No matter how tight a contract is worded, fleets that have sole supply arrangements are at the mercy of those providers. Their very business survival maybe questionable and any price increases, no matter how large, will have to be swallowed.
“Vehicles and a range of fleet management services are crucial to the successful operation of thousands of businesses across the UK. Companies must therefore hedge their bets amid financial uncertainty and use a number of organisations to supply services.”
See also:
No comments yet
