Timing is everything in fleet management and process improvement, including when to replace fleet vehicles. On-time replacement helps companies achieve the lowest possible cost over a vehicle’s lifecycle and improve fleet processes. Creating a proactive fleet vehicle replacement plan ensures optimum resource allocation and happy clients.
Build Vehicle Replacement Plans around Fleet Management Data
Every aspect of feel management is enhanced by end-to-end data visualization. Data is at the center of everything from tracking vehicles throughout their lifecycles to life-extending maintenance to enhanced client communication.
Fleet management companies must gather and organize their data effectively to run more efficiently and profitably. A data-centered approach is critical to creating and executing a proactive fleet vehicle replacement plan.
End-to-end vehicle data allows FMCs to see patterns and trends in each vehicle’s lifecycle to determine when the cost of maintaining a vehicle outweighs the benefits of remarketing and replacing it. Using data to review (and continuously revise) the fleet plan ensures managers replace fleet vehicles at the perfect time, not when they’ve overspent by keeping it on the road or when new inventory is cost-prohibitive.
A complete, unified view of the vehicle lifecycle helps ensure FMCs buy and sell vehicles at the right time, lowering fleet ownership and management costs.
Four Factors Guiding Fleet Vehicle Replacement Planning and Fleet Process Improvement
Fleet vehicle management and process improvement is continuous, and replacement planning is an essential part of a profitable, service-driven company. Long-term replacement planning is imperative as vehicles lose value and maintenance costs increase. Monitoring and implementing vehicle data into predictive analysis helps FMCs determine the best and most cost-effective time to replace each vehicle.
The following factors affect how and when FMCs make that decision.
Specific Operational Needs for Process Improvement
Fleet vehicle management requires FMC to select the right vehicle for each task according to client needs. A customized approach ensures the delivery of vehicles and services that meet customer expectations while maintaining operational efficiency.
Tracking vehicle use data throughout the lifecycle allows FMCs to understand insights into vehicle health, use patterns, driver behavior, and more, enabling predictive maintenance and, eventually, replacement. Below are essential data points FMCs need to monitor and analyze to create a proactive fleet vehicle replacement plan.
- Mileage: High mileage increases wear and tear, which leads to more frequent and major repairs, and a high odometer reading negatively affects resale value.
- Age: Older vehicles typically require more maintenance, and replacement parts can be more challenging to find, adding to higher downtime and costs and decreasing your resale value.
- Utilization: Decreasing idle time and maximizing in-use hours on the road is vital to effective fleet vehicle utilization. High utilization will lead to the most efficient use of the vehicle, cutting costs and boosting profits.
Maintenance Costs and Process Improvement
Maintenance costs are a critical consideration in fleet vehicle replacement and process improvement and are among the most costly aspects of fleet management. Keeping repair costs down while ensuring quality maintenance for each vehicle is a building block for optimized vehicle replacement plans.
Data-driven predictive maintenance mitigates repair and replacement needs, keeping vehicles on the road longer and with fewer instances of downtime. Every vehicle replacement plan should include robust predictive maintenance operations. Using historical, real-time, and machine-learning algorithms, FMCs can maximize every vehicle and every dollar spent keeping those assets on the road.
However, every vehicle will eventually reach the end of its life. As vehicles age, maintenance costs will rise. Higher-mileage vehicles usually require more frequent replacement because of greater maintenance needs and the resultant downtime spent in the shop. FMCs must review cost comparisons as they allocate budgets for maintenance versus vehicle replacement. Those resources might be better spent buying new vehicles than maintaining current inventory requiring constant repair.
Availability of Replacement Fleet Assets
Fleet managers can’t control some elements of a vehicle replacement plan, including market conditions. Managers need to monitor the market continuously, as the cost of new vehicles can fluctuate due to supply chain disruptions, economic factors, and manufacturer pricing strategies. By staying informed about trends in the automotive market, FMCs can time their purchases strategically, opting to buy when vehicle prices are lower, and inventory is more readily available.
Working closely with vehicle suppliers, leveraging data analytics, and monitoring factors like interest rates and incentives helps FMCs take advantage of the availability of cost-effective vehicle replacements. A proactive approach ensures the company maintains operational efficiency while managing costs, contributing to long-term fleet sustainability.
Resale Value and Depreciation
Just as buying replacements at the right time to optimize costs is crucial, fleet managers must understand the optimal time to sell assets based on resale value and depreciation. FMCs must walk the fine line between maximizing vehicle usage and selling before depreciation significantly affects resale value. Monitoring specific data points for each vehicle, including age, mileage, and past repairs, provides insights that help managers gauge the best time to sell.
Continuous Visibility that Optimizes Fleet Vehicle Replacement and Optimizes Fleet Processes
Data analysis will guide effective, timely, and profitable vehicle replacement. Unfortunately, most FMCs operate within disjointed information systems that keep data (and teams) siloed and inefficient. Without a comprehensive view of fleet and vehicle data, you put yourself at risk for missteps and inefficiencies that jeopardize your business.
The Ridecell platform provides end-to-end visibility of your entire fleet lifecycle across every stage and system, including detailed data for each vehicle and internal and external suppliers. This tool enables a proactive approach to fleet vehicle replacement that unlocks benefits far beyond cost savings. A strategic replacement plan enhances operational efficiency, safety, and fuel management. These factors, combined with real-time vehicle lifecycle visibility, contribute to a client experience that secures lifetime fleet management customers.
Ridecell is the best platform to manage data, optimize fleet processes, and create proactive fleet vehicle replacement plans that yield profits for your business and delight clients at this and every stage of their vehicle lifecycles.