Multinational corporations are changing the way they source and manage their vocational fleets to better identify true costs and to leverage opportunities to reduce spend and to maximize the operating efficiency of these specialized vehicles.
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 its going further up the asset chain in sourcing more complex vocational fleet vehicles; however, this has proven to be more challenging. For instance, the upfitting spend for vocational fleets is more complex because it’s harder to commoditize.
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.
Vocational Trucks Are Earning Assets
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.
If you want to learn how to better manage a multi-regional vocational fleet, the Global Fleet Services alliance comprised of ARI, Orix, and Eqstra will present on June 4, 2019, a first-ever Deep Dive discussion of best practices in the management of complex fleets in different regions around the world . The half-day discussion will be presented at the 2019 Global Fleet Conference, which will be held June 4-6, 2019 in Miami. Below topics that will be discussed:
* Understanding the Complexity of Managing Vocational Fleets in Europe: Complex 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. This session will provide the guidance on how to avoid common pitfalls in operating a vocational fleet in Europe and strategies to optimize fleet efficiencies.
* Managing Vocational Fleets in South Africa and Sub Saharan Africa: This session will explore the many issues that come with operating complex, vocational fleets across the African continent. Vehicle maintenance presents a key challenge because of the inadequate service infrastructure. Learn from local subject-matter experts on how to address these challenges, while optimizing control of fleet operating expenses.
* Strategies to Optimize Lifecycle TCO in Latin America: The two largest fleet markets in Latin America are Mexico and Brazil. This session will address the unique needs of vocational fleets in each market. Discussed will be best practices in vehicle spec’ing, decaling, maintenance management, and asset disposal at the end of a vehicle’s service life. Learn how to minimize the complexity of trans-national, vocational fleet management.
* Best Practices in Operating a Vocational Fleet in North America: The session will explore the various requirements in the U.S. and Canada in successfully managing each stage in the fleet lifecycle, with particular emphasis ranging from specifications to ordering and upfitting, managing operating costs, and strategies to maximize resale values at time of disposal. Learn from in-country and regional experts on standardized best practices.
* Strategies to Develop Best-in-Class Vocational Fleets in Australasia and India: 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. Learn about best-in-class fleet management strategies to apply to fleet vehicles operating in Australasia. Also, discussed will be the growing fleet market in India and the best practices needed to maximize fleet efficiency and productivity.
You can find more information about the 2019 Global Fleet Conference at www.globalfleetconference.com