What Does “Good Value” Look Like In Fleet Procurement?

If you’re responsible for a fleet budget, comparing options is unavoidable. Procurement gives organisations a structured way to compare different options, with decisions that can be tested, justified and defended. But comparison alone doesn’t tell you whether a fleet decision represents good value.

Procurement can tell you what you’re buying at the point of decision. The consequences of that decision will only emerge once the fleet is in operation.

Neil Jeremiah, Managing Director at Endurance, explains:

“I think we sometimes make the mistake of treating the price at procurement as the cost of the decision. It isn’t. It’s simply the cost we know about at that point in time.”

“When you’re comparing bids, you have to work with what you can see: price, specification, contract terms and service levels. That’s how you make different options comparable. But once the fleet is in operation, you’re dealing with things you couldn’t fully predict when the decision was made.”

“For example, take a vehicle going off the road. The immediate problem isn’t simply that you’ve lost an asset. Someone has to work out how the service continues, whether that means finding another vehicle, adding resource or changing how the work is done. The original contract price doesn’t tell you what any of that will cost.”

“For me, that’s where the idea of value needs more thought. If one option costs slightly more but deals with those situations within the service, while another leaves the operator to sort them out, are they really the same value? I don’t think they are.”

This is the thinking behind Endurance’s Equipment-as-a-Service model. Equipment, maintenance, fleet management and replacement provision are brought together within one operating model, so when circumstances change, the response remains part of the service.

When a vehicle goes off road, the operator isn’t left to find another vehicle or work out how to keep the service running. That responsibility sits with Endurance.

Good value therefore means more than paying the right price at the start. It means knowing what happens when the operation doesn’t go to plan.

With Endurance you get safe, reliable and efficient value from your vehicles, find out more about our Fleet Management Services.

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