Small and medium enterprises (SMEs) have never faced a more challenging period of time. Quite apart from the difficult economic climate that already existed, the last two years have presented us with Brexit uncertainty and the COVID-19 pandemic, along with the inexorable shift towards online sales and the changing buying habits of an aging population.
As a result, it is no surprise to learn that 57% of SMEs have adapted their business models since the start of the pandemic in 2020, but this might have been a trigger for some profound changes that made absolute sense anyway.
Why SMEs should consider fleet management
Certainly, the shift in consumer demands during the pandemic have seen many SMEs extend their delivery services. Lean and smart thinking naturally brings delivery services into the equation because they can reduce overheads and waste and can streamline an organisation proactively. But in the last 12 months, adapting a business model to bring goods and services to a consumer’s doorstep has increased because it makes plain commercial sense, and particularly when fuel, technology and vehicle procurement can be closely managed to make this switch cost-effective.
If you are an SME considering taking more of your business online and increasing your delivery services, fleet management will become one of the key departments in your organisation. Certainly, if you ‘can’ deliver goods and services directly to your customers, then fleet management is how this can be done efficiently and in line with your organisational targets and objectives.
In terms of vehicle procurement, leasing is the answer to finding vehicles which are practical and functionally appropriate to your operations in terms of size and shape, before we even consider fuel efficiency. But there are many other benefits to leasing vehicles:
- You don’t have depreciating assets on your books
- You have one manageable and predictable motoring cost per month
- You can choose from new vehicles at the start of every lease and therefore always benefit from new technology, new safety features and better fuel efficiency
- Vehicle leasing introduces you to the important concept of monitoring mileage
What is good fleet management?
Fleet management can be summed up in many different ways, but primarily for an SME it will involve administration, co-ordination, tracking, compliance and communication. These all have a goal of delivering goods and services, but also delivering cost savings. A fleet management organisation such as Total Motion can bring an average of 18% in cost savings through good fleet management techniques. And a lot of this comes from vehicle tracking. This is necessary because lease contracts are agreed via mileage restrictions, ie. your monthly cost for leasing the vehicle is based on how many miles you say you will do.
Vehicle tracking is done via GPS technology and is the key to how fleet management delivers its most significant cost savings. Your fleet operations will provide vast amounts of usable data on a daily basis, so improvements can be identified by:
- Monitoring mileage to reduce waste – ie. driver time on the road, inefficient deliveries (part-loads/full loads, collections and returns etc)
- Journey planning – quickest routes and avoiding traffic jams
- Driver behaviour – changing driving techniques to improve fuel efficiency
Good fleet management provides better information on all vehicles and all drivers, it can even help with compliance issues and providing proof of delivery etc, and you can use different metrics to implement improvements and targets. Ultimately these can:
- Improve delivery times
- Reduce product/service costs
- Increase customer satisfaction with more accurate information and better delivery turnarounds
- Improve sales
Using fleet management to reduce costs
If you use this information to reduce waste and improve performance, you should be able to provide an all-round better service to your customers, and set goals to reduce mileage, reduce breakdown and accident costs and improve fuel efficiency, which will all demonstrate a better performance on the bottom line. Fleet management therefore becomes a tool through which you can strive for continual improvement, to become a more efficient, leaner organisation.
As an SME you can speak to Total Motion about your fleet needs and we can use our many years of experience and expertise as fleet professionals to help implement fleet management in your organisation. This can drive change to improve your delivery services in line with customer demands, and do this whilst making your organisation more aware of its costs and more capable of reducing them, so get in touch today.