Focus on Fleet Expenses
The motor vehicle fleet in most organisations is generally one on the Top 5 expenses! Yet there are consistently examples of poor cost control that negatively impacts ROI.
At the top of the list will be vehicle under-utilisation!
Optimal Fleet Size
How many vehicles do you have in your fleet at present that are under-utilised or under-performing? Do you know your fleet utilisation?
The size of your fleet is a critical decision that will impact directly on your operational and financial efficiency, profitability and ultimately stakeholder engagement.
Is your vehicle Demand less than the Supply of vehicles – that is under-utilisation? The resultant cost savings from the disposal of unwarranted assets should be pretty clear.
Or does your vehicle Demand exceed Supply? Should you rush in with a long-term commitment to acquire more vehicles or perhaps consider alternatives?
In 2020, many organisations found their fleet asset utilisation greatly diminished due to COVID-19 lockdowns across the country. Demand fell, the need for the fleet size reduced and the inflexibility of the existing fleet management arrangements caused significant financial stress to the organisation(s) holding large assets.
Many organisations were suddenly faced with under-utilised assets, reduced revenues and consequently a much higher ratio of cost / benefit.
Fortunately, the economy is recovering nicely but there are still challenges arising from a workforce that is now more ‘inclined’ to work from home.
A review of your management strategy in regards your fleet size and composition is potentially a daunting prospect. And a process that is often overlooked – yet the topic of some robust discussions around the boardroom table when profit ratios start declining.
So why not get expert advice. Contact Fleet Advisory for an objective review of your fleet size and composition. Take back control!