The Importance of Fleet Right-sizing7. June 2017
KEY TAKEAWAY: Fleets are an expensive asset, and finding ways to reduce costs may involve removing some vehicles from the fleet. Right-sizing provides opportunity to optimize operations, like with a motor pool.
Corporate fleets are essential to many businesses, especially in the public sector. These vehicles owned by the company allow employees to do their job, such as fixing electrical poles or doing field work. However, many times these vehicles are underutilized, which occurs when vehicles are assigned to departments or individuals who only need occasional access.
When this situation repeats itself across the company, vehicles spend more time in the parking lot than on the road. As a result, companies end up paying a higher total cost of ownership (TCO) than necessary. TCO includes maintenance and repair costs, third-party service fees, and depreciation, to name a few¹. Fortunately, businesses have the opportunity to minimize fleet costs by analyzing each vehicles true demand and right-sizing the fleet to an optimal size. By understanding all the costs associated with owning a vehicle and how drivers use the vehicles, fleet managers can make a smart, numbers-supported decision on how to modify the fleet².
Relevant Content: How Fleet Management is Growing
It is always important to maximize the value of resources in order to have room for growth, regardless of the current economic state. The benefits of right-sizing a fleet of vehicles are numerous: reduced fuel and maintenance costs, reduced greenhouse gas emissions, and a lower capital investment in vehicles³. Right-sizing can even be taken one step further by implementing a motor pool program, where vehicles are shared across departments.
In a motor pool, drivers make reservations on vehicles only when they need it, allowing other users to access the vehicle when it is available. In an automated system like INVERS, vehicle usage can be distributed to equalize mileage placed on vehicles and usage can also be billed to the appropriate department. Regardless of the system used, motor pools allow businesses to further greenify their fleet and maximize the vehicles capacity.
Managing a fleet of vehicles requires balancing the needs of management, the drivers, and vehicle requirements. Right-sizing the fleet is a step towards ensuring the operations are cost-effective and sustainable, providing a solid foundation for further growth.
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- Using Fleet Management Best Practices to Meet Federal Mandates.” Accenture Consulting. Accenture, n.d. Web. 25 Apr. 2017. https://www.accenture.com/us-en/insight-using-fleet-management-best-practices-summary
- Rightsizing Your Vehicle Fleet to Conserve Fuel.” Alternative Fuels Data Center. US Department of Energy, n.d. Web. 26 Apr. 2017. http://www.afdc.energy.gov/conserve/rightsizing.html
- Vehicle and Fleet Right-Sizing.” BC Climate Action Toolkit. Green Communities Committee, n.d. Web. 26 Apr. 2017. http://www.toolkit.bc.ca/tool/vehicle-and-fleet-right-sizing
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