Fleet managers spend a lot of time managing fleet costs. Many companies in different industries are turning to integrated fleet management software to effectively track cost of ownership (TCO), gain productivity and improve fleet profitability.
In this article, you will find relevant tips to improve your fleet cost management plan.
Maintaining a fleet comes with many challenges, but managing fleet costs is perhaps the most complex task. Not managing the costs of your fleet can have a negative impact on profitability and your organization as a whole.
Managing fleet expenses can be a headache, especially when calculating manually or through multiple spreadsheets. Fluctuations in costs and hard-to-read data can cause you to miss important trends and gaps in your fleet. Optimizing your fleet cost management plan with fleet management software allows you to effectively track and analyze total cost of ownership (TCO).
The most difficult aspect of managing fleet costs is calculating the true total cost of ownership (TCO) of your fleet. Understanding your TCO allows you to make data-driven decisions to better manage your fleet.
Fleet costs are divided into fixed and variable costs. Fixed costs are established costs that do not change regardless of use. (taxes, vignettes, insurance, etc.)
Variable costs vary depending on the size and usage of your fleet. Since the fixed costs are predetermined, you can focus on how to improve the efficiency of the fleet to reduce the variable costs. (fuel, maintenance, spare parts, tolls, etc.)
Fleet management software allows you to create custom reports to easily determine your total expenses and better control variable expenses.
Fuel is the biggest ongoing expense for fleets. While you can't control the price of fuel, there are ways to reduce and manage these ongoing expenses.
Because fuel is a variable cost, monitoring the costs and consumption on each of your assets is crucial. By tracking all fuel purchases, you can determine the average cost per mile to forecast future expenses.
That said, trying to track fuel receipts and manually entering them into a spreadsheet is a poor use of time. To easily get an overview of your fuel expenses, consider using fleet management software to save more time and limit aberrant consumption.
One of the best ways to reduce fleet costs is to adopt a proactive strategy on preventive maintenance. Unplanned maintenance tasks do happen, but if you don't properly maintain your assets, you would face increased downtime and unplanned expenses for your fleet.
A preventive maintenance plan keeps your fleet safe by staying on top of regular maintenance, oil changes and parts replacement.
With the fleet management software, you will receive technical alerts, so you never miss a maintenance. These notifications maximize uptime and limit unnecessary expenses.
Parts account for over a third of vehicle maintenance costs, so it is essential that you have a strong inventory management system.
While having the right parts to keep up with maintenance tasks is essential, you may be buying excess inventory that costs both money and space.
A safe way to control your inventory levels and reduce overspending is to use fleet management software to track quantities, receive replenishment notifications, and assign parts to work orders.
Streamlining your fleet cost management with software saves you the hassle of entering data and searching for information in spreadsheets.
Reducing operating costs is an important and ever-present challenge for fleet managers. Discover with DIGIPARC how your fleet can reduce costs and operate more efficiently.