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tract, data analysis reveals that some of the forklifts have
been used 4,000 hours per year, while others have only
been used 1,000 hours. Armed with this knowledge, you
can now work with your financing partner to shorten the
term of the overutilized assets in order to avoid overtime
charges and escalating maintenance costs. You might also
decide to extend the term of the underutilized equipment at a lower monthly payment that matches your
actual usage. Steps like these, if taken on a regular basis,
can save organizations hundreds of thousands of dollars
in overtime, maintenance and overpayment costs.
One common challenge is that it can be extremely
difficult to gather meter reads on a regular basis, and
the larger the fleet, the more complex this task can be. If
your fleet professionals have access to the data, the task
is fairly simple. But surprisingly, many large organizations
resort to having someone manually pull meter reads on a
quarterly or annual basis. Others never do it at all. Unfortunately, that means finance teams never have access to
the data they need in order to restructure out-of-balance
contracts or effectively structure new ones.
If you are concerned that your finance and operations
teams are not on the same page with regards to your
fleet, here are a few tips that can help bridge the gap:
1. Host an offsite workshop with your operations, finance
and fleet groups to dig into the TCO model, and
schedule quarterly health checks to discuss the status
of your fleet. Invite your finance partner and maintenance suppliers to the meetings so they can share best
practices as well.
2. If your organization does not have a web application
or platform to house all TCO information, create a
spreadsheet that includes the operational, finance and
maintenance data related to each asset in the fleet.
Update the data at your quarterly meetings in order
to identify issues and manage through them as soon as
they become evident.
3. If you do not have access to this data, or if your fleet is
too large for excel to effectively handle, look for software as a service (SaaS) solutions that can house this
information or find a fleet-centric financing partner
that provides these tools as a value-add for your entire
fleet (not just the equipment you are leasing with
them).
Effective fleet management is an ongoing process that
relies on regular analysis of data, including usage, maintenance costs, contract allowed hours, contract terms and
conditions. Far too many companies have eyes wide open
at the beginning of the contract, only to ignore their
assets until the time of return. As we wait for innovations such as usage-based leasing and fleet-centric leasing
methodologies to become more accepted and prevalent,
the importance and ability of your finance and operations
executives to speak the same language when it comes to
fleet management cannot be emphasized enough. Continuous communication between the two departments
and the data-driven decisions it drives will afford your
organization years of successful TCO management.
Theo Rennenberg is the Global Fleet Asset Manager in
the Construction, Transportation and Industrial Business
Unit of DLL, a provider of equipment financing and fleet
management solutions in more than 35 countries. He is
a 36-year veteran of the equipment distribution industry
and has specialized in fleet management throughout his
career.
