Over the decades, procurement has become more and more involved in sourcing fleet assets. Initially, procurement started with lower-hanging fruit, primarily company cars, but now it’s going further up the asset chain in sourcing more complex vocational fleet vehicles; however, this has proven to be more challenging. As a consequence, multinational corporations are seeking to change the way they source and manage their vocational fleets to better identify true costs, The goal is to leverage opportunities to reduce spend and to maximize the operating efficiency of these specialized vehicles. However, the upfitting spend for vocational fleets is more complex because it’s harder for procurement groups to commoditize these services.
Frequently, upfitters are not global or even multi-regional operations, so it continues to be a local discussion with local suppliers. While sourcing drives the conversation, the local fleet decision-makers are key players because they know the local upfitters and truck OEMs. Also, the upfitting supply chain varies by region.
For example, in Mexico and Latin America, the supply chain is different than in North America. In Latin America, it is not uncommon for manufacturers to do some of the upfitting. It's not always the most efficient way to do it because it’s not their core competency. On the other hand, in South Africa, some fleet management companies operate specialized upfitting businesses that provide a full package integrated solution.
Maximizing Asset Productivity
More and more sourcing managers view work trucks as earning assets. To maximize the productivity of this working asset, vehicle sourcing requirements are defined by the fleet application and mission requirements. Without fully understanding the fleet application requirements and operating parameters, it is impossible to source the best chassis, powertrain, and body necessary to optimize productivity.
When managing assets on a global basis, it is important to identify best practices among regional operations and start applying these practices to other markets where you operate. The reality is that regional vocational fleets in the same organizations are often isolated from each other and unaware of operational efficiencies occurring elsewhere. Although they are the same company, there is generally no sharing of information. When you eliminate these information silos, a fleet manager has the potential to add recognizable value to the whole organization.
How you adopt these best practices will give better control to your complex fleet, which generates the ongoing cost savings. After you buy a truck from a dealer or manufacturer, you start acquiring add-on equipment, which is when your cost can go up significantly. Depending on how expensive the upfitting is, sometimes it's worth more than the vehicle itself. If the equipment is not optimal to the application, it will have a huge impact on your business. This is one reason why some sourcing operations have been reticent to get involved with vocational fleets.
When sourcing a vocational truck there are a number of critical factors that must be correctly addressed; otherwise, you’ll end up making an expensive mistake.
You need to understand the complexity of managing vocational fleets. For instance, vocational fleets in Europe have complex needs. Add to that regulations, requirements, and risks that come with operating across 40 countries, it creates an entirely new level of complexity.
Elsewhere, in South Africa and Sub-Saharan Africa, the primary issue is vehicle maintenance, which presents a key challenge because of the inadequate service infrastructure.
The two largest fleet markets in Latin America are Mexico and Brazil, with each market having unique needs for vocational fleet operators, such as best practices in vehicle spec’ing, decaling, maintenance management, and asset disposal at the end of a vehicle’s service life.
In North America, there are a multitude of requirements in the U.S. and Canada in successfully managing each stage in the fleet lifecycle, such as identifying the best specifications for upfitting, managing operating costs, and strategies to maximize resale values at time of disposal.
Likewise, there a different strategies to develop a best-in-class vocational fleets in Australasia and India. For instance, the economies of both Australia and New Zealand are dominated by vocational fleet vehicles since the largest economic segment of both countries is the service sector. Also, the vocational fleet market in India is growing and there is a strong need by end-users to identify best practices to maximize fleet efficiency and productivity.
Don’t Reinvent the Wheel, Learn from Peers
Managing multinational vocational fleets is a complex endeavor. But you don’t need to reinvent the wheel to become good at it. If you want to learn how to better manage a multi-regional vocational fleet, one of the best ways to do so is to attend the Global Fleet Conference, which will be held in-person on Oct. 26-28, 2021, in Miami. The Global Fleet Conference is a great opportunity to learn best practices in the management of complex fleets in different regions around the world .
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Originally posted on Global Fleet Management