One of the biggest challenges associated with fleet maintenance and repair is monitoring and controlling the costs associated with keeping your fleet on the road. If you don’t have good fleet management, it will certainly have an impact on your profitability and on your success as an organization.
If you’re still trying to manage your fleet costs through spreadsheets or by manual processes, it can be a massive headache, and more than likely you will overlook some significant trends and deficiencies relative to the fleet. This being the case, your best bet is to make use of some outstanding fleet management software so that you can track and analyze all costs. You can automatically upload the data you get from your Software System into cloud-based software so that you can generate any kind of reports you need for managing expenses.
Here are some of the most important aspects of managing and controlling costs associated with fleet maintenance and repair.
Calculate the Total Cost of your Fleet Management
It’s important that you use whatever means are necessary to calculate the actual cost of fleet ownership. Once you have an accurate picture of this, you’ll be able to make better decisions on managing your fleet. Fleet costs are divided into fixed and variable costs, with fixed costs being taxes, licenses and permits, depreciation, and loan repayments. Variable costs are always changing and include maintenance, fuel, parts replacement, and tolls.
By using fleet management software, you’ll be able to create custom data that helps you to control variable expenses better and show you what your total expenses really are. This will allow you to track your assets better, and to develop a good program for vehicle maintenance and vehicle replacement. Rather than trying to crunch numbers manually or through spreadsheets, you’ll be able to save a great deal of time and accuracy by using tools that are more effective.
Manage your Fuel Usage
For any fleet, the largest ongoing expense is invariably the cost of fuel. Obviously, there’s not much you can do to control the price of fuel, but there are ways that you can manage fuel use and lower it so that it becomes cheaper. This means that you need to track all fuel purchases and calculate the average cost per mile, to forecast all future fuel expenses. It can be a massive headache if you’re trying to do it all manually, so make sure that you’re able to track it all within your fleet management software.
Customize your Fleet Maintenance and Repair Plan
One good way of controlling fleet costs is by implementing a proactive approach to preventive maintenance. There will, of course, be some surprise maintenance tasks that pop up now and then, but if you’re not periodically maintaining your fleet vehicles, you’ll always have greater downtime and more unexpected expenses.
Use your software system to stay on top of regular servicing, replacements, and any upgrades necessary. Whether you do your own fleet maintenance or have it outsourced to a third party, your software should provide regular alerts and communications so that all your vehicles are serviced properly.
Improve your Inventory
Your parts inventory will comprise approximately 33% of your overall fleet maintenance and repair costs, so it’s extremely important that you maintain a robust inventory management system. It’s always difficult to achieve just the right balance between having adequate on-hand inventory and purchasing parts when needed.
It will, of course, be necessary to have the right parts on hand, so that you can stay abreast of any ongoing maintenance requirements, but it’s always a balancing act because you may be purchasing surplus stock that takes up space and ties up assets.
This means you need to be aware of how much those extra parts are actually costing your organization, and this is another time when you want to use your fleet management software to apprise you of the true picture of inventory cost. When you have your own online parts database, you’ll be able to track your inventory and gain greater visibility into the kinds of usage that you’re encountering on a regular basis. This will help you reduce your inventory, by eliminating items you rarely use.
Right-size your Fleet
You may not be using your assets in an optimal manner, and rightsizing your fleet is one of the steps you can take to lower maintenance costs and the overall cost of maintaining your fleet. The two biggest factors associated with right-sizing are asset utilization and the replacement schedule for vehicles.
In order to make good decisions about right-sizing, it will be necessary to consider how you´re using your assets, and whether or not they may be impacting your bottom line in a negative fashion. Once you’ve answered these questions for your company, you’ll be in a position to make sure you have the right amount of vehicles on the road to accomplish your organization’s ongoing objectives.
Monitor Asset Utilization
You may have assets within your fleet which are either seldom on the road or are not used at all to conduct daily business. Underutilized assets that stay in the garage are still incurring expenses and costing you money.
It might be worth your while to consider selling off vehicles you don’t use. This will help to consolidate your fleet and maximize efficiency, while also lowering your overall operating cost. In order to make decisions like this, you should review relevant information on cost and asset utilization within your fleet.
Implement a Vehicle Replacement Plan
Closely related to asset utilization is another area where you might discover that some assets are underperforming or getting constant repairs. These are assets racking up significant downtime, and costing you more money in unplanned expenses. At this point, you may want to consider vehicle replacement as a more effective strategy for your fleet.
By keeping vehicles that need constant repairs, you’re throwing good money after bad, and trying to stretch out the life expectancy of a vehicle that is really just soaking up your resources. This is why you should put in place a formal vehicle replacement plan, and consider the right time to swap out vehicles in favor of more fuel-efficient vehicles. Remember that the largest single expense when maintaining a fleet is fuel cost, so if you can get more fuel-efficient vehicles, you’ll be doing yourself a big favor in the long run.