Fleet Management-developing The Most Cost Effective Procurement Strategy

Once you are ready to enter fleet management from the perspective of strategy

, it will be time to begin thinking about the vehicles that you are going to use. This can be a tough decision to make, especially in today's uncertain economic climate. The best advice that many experienced fleet managers are giving to those who are just beginning is to consider short term leases.

The reason is that a long lease in a tough economic setting can be dangerous for both the fleet manager and the leaser. Either organization could suffer a hit that could put them out of business, or at least lead to drastic cuts. The best deal for new managers is to start with short term leases that will allow a change every month or year.

Another basic of fleet management when it comes to procurement is to get the users involved. This may seem counterintuitive at first, since the more cooks there are in the kitchen, the longer it takes to make decisions. In the case of procurement, however, you are going to want plenty of feedback. The users are the people who are going to have the specifications and the knowledge of the hands-on use of the vehicles. They may know when a vehicle will not serve the purposes of the organization and when a vehicle might be just right. A user can tell you when you are wasting money on features that will not help your business.

When it comes to procurement, smart fleet management requires managers to consider more than just the vehicle itself. While this should be the spine of any decision that is made, it is important that a real life cost is assessed. This cost will include maintenance, repair, breakdowns, and tyres. This cost will also include potential fines and general costs for keeping the vehicle.

Finally, the basics of fleet management require that managers keep an annual budget. This may be the key to smart procurement. You can only work within your financial range. Therefore, staying under your budget and going over your budget are going to have negative effects. In order to get the most out of your budget, that total needs to be calculated and challenged. This will create a good starting point for the procurement process.

Remember when applying your budget, it's important to consider all of the details of the vehicles. More often than not, there will be more fees than you expect, so it can't hurt to tack on extra cost in your long-term financial planning.

by: Jackie De Burca

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