Over recent years there has been an explosion in the number of Procurement Specialists who claim to be able to deliver savings on fleet costs that Fleet Managers, Fleet Management Providers and Lease Providers can’t.
While there are a number of incredibly professional organisations out there, there are more that want to deliver savings for no upfront charge on a gain share basis – deliver a solution that looks good at the time, take their fee and move on.
During the last year Total Motion has seen numerous examples of such specialists who seem more focused on savings and of course their fee than what the end product looks like.
Here are some examples:
A Care Home group was advised to move to contract hire with maintenance over 4 years for a supposed saving of £1.6M. When this was analysed, taking into account their VAT position, true life cycle of vehicles, and end of life exposure, the real benefit was less than £220K and their lack of knowledge missed an opportunity that could have saved £4.8M
A commercial machinery service provider was advised to move from one manufacturer to another for an on paper capital saving of £980K. However, when a full whole life cost analysis was run, this became a negative of £63K.
So the message is; procurement is key to every business, but when it comes to fleet that has so many variables, those giving the advice have to be tested and have a proven record that can be tested using an independent whole life cost model.
