A new white paper that navigates the pitfalls of fleet procurement for a successful tender process is now out from Venson Automotive Solutions.
The Tackling Fleet Procurement Challenges Head-on white paper aims to equip decision-makers with the essential knowledge for successful fleet procurement.
Fleet is often a company’s second largest overhead and the need to optimise fleet procurement is critical.
But Simon Staton, client management director at Venson, said fleet is commonly viewed as just another commodity purchase, with the focus solely on the lowest price.
“Unlike buying office stationery, for example, fleet procurement is a ‘financial deal’ that includes vehicles and often a range of in-life services. It’s certainly not black and white. So, it is crucial that anyone involved in the procurement process fully understands what they are buying, and that the variables that make up the price are dynamic and can change during the lifetime of a contract.”
Venson’s white paper can help fleet decision-makers, and their procurement partners, navigate the challenges of selecting the right fleet provider. It includes everything from establishing a solid foundation for the procurement process, including how to draft a successful tender document, to assessing responses to tender and finalising a formal contract.
Staton added: “There are so many elements to the procurement process and stakes are high, so it can’t be rushed. One of the crucial points to remember is that value for money should never be mistaken for the lowest price, there’s no such thing as a ‘golden deal’. It’s essential to think of the contract in its entirety, taking into consideration factors such as rate creep, including end-of-contract charges and damage waiver fees.
“Additionally, there’s a need to account for current and emerging technology to be factored in. Fleet decision-makers should always opt for transparency, in a contract that considers long-term value, rather than short-term gain.”
Venson’s key tips for fleet procurement
Use a scorecard approach to find the best provider – fleet selection is a significant business decision and should not be rushed.
Price should account for 25-40% of the scorecard in terms of capability – attributing 50% of the score to price is missing a trick and making price too important.
Do not confuse value for money with price.
Consider rate creep in your calculations, how monthly lease rates can rise due to the numerous variables that affect rental terms.
Do not forget to include other costs in calculations: End-of-contract charges, early termination charges and damage waiver fees to name a few.
Look into how vehicle downtime is managed and minimised by each potential provider – do they offer night-time servicing and repairs?
Investigate the maintenance clause. Does it include service scheduling, service due reminders and vehicle collection and delivery, to save time for the fleet manager or driver?
Research customer service performance – poor service can decrease efficiency and use up valuable working hours when problems are not managed effectively.
Ask for customer case studies and references and take time to speak to someone who is already receiving the service.
Visit each supplier and meet the people who will be looking after your fleet and see how they will manage it day to day.
The Venson white paper on fleet procurement is online here.
