Fleet Procurement — Everything You Should Know
Are you familiar with the term fleet procurement? If not, then this article is for you.
This article will discuss what fleet procurement is all about. Additionally, we will also tell you the effective fleet procurement planning that you can use in your company.
Once you are done reading this article, you will have an idea of what fleet procurement is. Thus, allowing you to create a successful fleet procurement in your company.
Not many people in procurement, especially the new ones, have an idea about fleet procurement. Some might even think that it is about the procurement of a literal “fleet”. However, it is not the case.
Fleet procurement is the acquisition of goods and services which may seem as simple as an ordinary purchase in the course of the procurement process.
However, if you start seeing below its surface, you will see how it differs from the ordinary purchases of a company.
Fleet procurement is the purchase or acquisition of goods or services of a certain quality and quantity which is bought at a specific time from the best supplier you have. Additionally, your purchases have the best terms and typically are subject to a contractual obligation to protect both parties in the negotiation.
When companies deal with the fleet procurement process, their usual mistake is considering the purchasing of vehicles as the final objective in the fleet procurement process.
The truth for fleet procurement processes is that it considers more than just the acquisition of vehicles. It includes tires, insurance, fuel, replacement parts, and components and not just the physical aspect of the asset.
A deep evaluation of the elements the fleet needs before the process starts is necessary for fleet procurement as it ensures that the company ends up with sufficient assets, resources, and services.
Fleet procurement is not an easy task and involves considering different possible options and the ability to predict the cost of the fleet to the company. This process is usually the most crucial for fleet managers.
The decision of the fleet managers dictates the future of the fleet which affects the reputation of the company and the fleet director’s job.
The process of fleet procurement needs to be done by negotiating favorable contract terms and prices and ensuring that all functions as a product or service for the profit of the company.
The top management and the fleet manager must collaborate so that the top management has an overview of how the fleet procurement works and how the sourced materials impact the fleet itself.
EffectiveFleet Procurement Planning
No procurement process has started without a plan. All business initiatives must always start with a plan to know your direction. The planning process is important as it allows you to decide what, when, and where to purchase.
The following are the things you should consider to create an effective fleet procurement plan:
A clear outline of the budget is necessary for fleet procurement processes or operations to run successfully. Deciding the allotted budget across the whole department is the most important part of the planning process as it dictates how far the other step can go.
Now that you have allotted a budget, the next thing you will need to do is to know the products that you have to buy.
Sourcing and knowing where to find the supplier for the products that you need is a different process in itself. However, you will be able to make decisions on this based on your fleet and its requirements.
The fact that you already secured a budget gives you a clear indication of the supplier that you will need to acquire the products.
It is important to have an accurate representation of time across your plan in ensuring that items are secured at the current time. BY ordering at the correct time, you can ensure that all resources for your fleet are available and can be purchased at a lower rate.
For example, if your fleet is about distributing fire logs and woods, the typical season you are busy in winter due to the fact that most houses will need heating to warm themselves from the cold. Therefore, this is the time that you will need to order more fuel cards to accommodate the extra staff due to the demand for your product.
The new projects of a company sometimes require extra resources. You will know whether you can cope with the requirements of the plan by planning your budget, the products you will need, and time.
Skillsthat a Fleet Manager Must Possess
A fleet manager is responsible for the company’s group of vehicles. It includes all aspects from hiring to maintaining the efficiency of the fleet.
Fleet managers have the responsibility of managing the costs of the vehicles leased or owned by their companies. Additionally, they create policies based on the requirements of the company to manage the usage and driver behavior of the fleet.
These are some of the skills that a fleet manager must possess:
- Legal experience – They need to have a good grasp of all the legalities of the contracts to ensure that they can gain favorable contract terms and that the company cannot be susceptible to procurement fraud.
- Negotiation skills – Fleet managers must possess good negotiation skills to get the best price, terms, and conditions with their suppliers.
- Risk management – They need to know how to handle and manage risk when problems or emergencies arise in the supply chain.
+ What is fleet procurement?
Fleet procurement is the purchase or acquisition of goods or services of a certain quality and quantity which is bought at a specific time from the best supplier you have.
+ What makes a great fleet manager?
A great fleet manager has wide industry knowledge and possesses good negotiation, legal, and risk management skills.
+ What is the difference between fleet and vehicle?
A vehicle is a thing used for transporting people or goods while fleet vehicles are a group of vehicles used by a company. The company may have its own fleet or lease it to a fleet company.
+ What is a fleet company?
A fleet company is simply a company that owns a huge fleet of transportation vehicles to lease to other businesses.
+ Why is fleet management important?
Fleet management is important as it is an effective way to know the excessive costs of the fleet and lessen the utilization of the resources of a company.
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