Smart Businesses Turn To Fleet Management During Economic Downturn
With so many unknowns surrounding how a ‘new normal’ will look once Coronavirus restrictions have been lifted, many organisations are already thinking about how they can sensibly manage their businesses in the future. Nobody really knows how society will look once lockdown measures are systematically relaxed, but one thing we can all probably agree on is that the current economic downturn is likely to hit businesses hard for the remainder of 2020 at least. It is therefore prudent to be assessing what precautions your organisation can take now, and in terms of cost-cutting measures, turning to fleet management and car leasing is one of those.
Many organisations have furloughed staff or are running on a ‘skeletal’ basis, and even if you are operating at near normal levels, the current situation is an opportunity to reflect and ready the business for new challenges ahead. Undoubtedly those will include a need for some smart thinking, some organisational pruning and some lean management. One of the many functions of a typical business that can be outsourced is that of fleet management, and in these difficult times, this is one area where smart businesses are seeing obvious opportunities for cutting costs and managing resources more sensibly to reflect the uncertain times.
How can fleet management reduce operational costs?
Fleet management and car leasing can reduce costs in a business by:
- Utilising technology such as vehicle tracking and smart communication to reduce wasted journeys, better route planning, reduce idle time and better manage fuel efficiencies
- Reducing costly and/or ageing assets on the books, freeing up capital spending power for more critical areas of the business
- Setting goals and managing KPIs to better track metrics such as fuel usage and employee utilisation
- Tax benefits
Whilst many businesses see fleet management as an integral function of the business, and have in-house departments dedicated to it, others perhaps can’t justify this expense and hence outsource it to a fleet management provider. This removes resource costs in terms of employment and IT infrastructure, but also enables a dedicated specialist to immediately apply critical industry standards and expert thinking to help save costs at this unprecedented time.
Fleet management is driven by structured objectives, and this helps to manage day-to-day costs, but also helps with longer term goals, such as reducing the annual spend on vehicle leasing, fuel usage and maintenance costs. Objectives can also surround the implementation of other cost-efficient schemes such as car salary sacrifice or ECO car ownership.
Setting fleet management goals to help with long term business prosperity
You may also task a fleet management provider with a project such as introducing hybrid vehicles or turning an entire fleet over to electric vehicles. This might be an organisational objective that involves several other departments, but certainly now is the time to be looking at targets and goals like this, and finally addressing outstanding projects which have been put on hold due to the suffocating forces of everyday business.
Several different costs come under the banner of fleet management, and hence it is critical that this is given dedicated management, particularly at a time where superfluous costs are coming under intense scrutiny. Managing an organisation in a leaner manner will become fundamental to surviving the impending economic uncertainty, and so now is the time to consider how your industry is changing and what are the likely repercussions for when Governmental restrictions are lifted.
Organisations need to be asking themselves, how can my business prepare and adapt for what is to come? This will affect all industry sectors differently of course, but a key aspect that is common to all, is that of controlling critical costs such as fleet management.
Now is the time to be looking at ways to manage this in line with changing circumstances, and to help the business ride out a potentially turbulent short-to-medium term future.