In a typical year, most fleet operators would now be preparing for ordering season by determining their budget, assessing models, developing specs, and coordinating with their supply chain vendors. However, the outlook for this year’s ordering cycle is clouded with lingering uncertainty. Although disruptions are subsiding, challenges remain and most fleets find themselves still trying to catch-up after two-plus years of limited vehicle availability.
With ordering season fast approaching, it is more critical than ever to be proactive in your strategic planning and budget allocation while also ensuring you’re well prepared to adjust for unforeseen detours.
To help you craft a comprehensive supply chain strategy for the upcoming ordering cycle (and beyond), here are a few key factors to consider.
Reassess Your Cycling Strategy From a Holistic Standpoint
As the supply chain rebounds, now’s a terrific time to take a fresh look at your overall fleet and cycling strategy. Ask yourself, how have three years of supply chain delays, limited vehicle availability, and extended lifecycles affected your fleet operations through all stages of the vehicle lifecycle – buy, drive, service, and sell.
With many units remaining in service longer than originally anticipated, you’ll want to ensure you develop a holistic strategy to address issues that may arise throughout each phase of the vehicle’s lifecycle. You may also need to adjust your operating budget to account for variables such as increased downtime and higher maintenance costs.
Budget Accordingly
Unfortunately, there’s no way around it. The reality is that the vehicles you order today are going to cost more than your last ordering cycle. This sentiment holds true for the upfit sector as well amidst an uptick in commodity (aluminum, steel, etc.) and component pricing.
Given those factors, you’ll want to be proactive in your planning and budget allocation to ensure you’re well positioned for this ordering cycle. Rather than simply planning for the year ahead, most fleet operators will benefit from a more macro approach. If you’re able to forecast three to five years out, you’ll have greater financial flexibility to adjust to unforeseen challenges or have capital available to take advantage of cost-savings opportunities that may arise.
Be Proactive But Plan To Wait
While lead times and production delays aren’t as significant as they were last year, you still need to expect – and plan accordingly for – longer lead times. A good rule of thumb is to anticipate a minimum of six months to receive your vehicles. Additionally, some order cancellations are unavoidable so you’ll want to have contingency plans in place to minimize the impact on your business.
Ready To Embrace EVs?
As you examine your supply chain strategy, now may be the ideal time to determine if your organization is ready to embrace EVs. While the transition to electric vehicles won’t happen overnight, many businesses are ready to begin integrating EVs into their fleet mix to align with their company’s overall sustainability strategy.
The good news is you don’t need to wait to get started. You can begin with an initial pilot program or portion of your fleet. Then, you can build on your successes by applying the insight and knowledge you gain to other segments of your fleet. Additionally, there are a variety of partners and resources available to help simplify electrification projects. By streamlining vehicle acquisition and infrastructure development, you can make integrating EVs into your fleet virtually seamless.
Remain Agile, Make Quick Decisions
With vehicle availability still somewhat limited, flexibility and quick decision-making are incredibly important. You’ll want to be well prepared to make acquisition decisions as quickly as possible. Discuss your strategy and budget allocation with the necessary stakeholders well in advance to have the framework of your solution in place. When order banks open or a particular model becomes available, act immediately.
You’ll also want to maintain an ongoing dialogue with your supply chain partners. Strong partnerships and transparent communication will allow you to remain agile and flexible.
Strategic Partnerships To Keep Your Business Moving Forward
As you work to navigate lingering supply chain challenges, you may need to get creative, adapting your budgeting, ordering, and overall fleet strategy to account for continued uncertainty. This is an area where it is extremely beneficial to partner with a fleet management provider, particularly one with visibility to the entire automotive industry. Your strategic partner should also align with and support your corporate social responsibility philosophies and goals.
Holman is proud to be the first and only global fleet management provider to be a certified women-owned business enterprise (WBE). Being a WBE-certified business is a reflection of the significant role women throughout our organization have played – and will continue to play – in Holman’s sustained growth and success. As a WBE-certified organization, our customers can classify their payments to Holman as Tier 1 Diversity Spend and further diversify their organization's supply chain.
Holman is ready to leverage the natural synergies of our various competencies to deliver the integrated solutions your organization needs. Our unsurpassed automotive expertise helps our customers stay ahead of supply chain uncertainty, pivot accordingly, and capitalize on potential opportunities to keep your business moving forward.
To learn more about how Holman’s holistic fleet management strategies can help maximize the potential of your fleet as a strategic business asset, visit Holman.com.
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