Avis FleetBlog


Here's what you need to know about procurement process best practices

When it comes to fleet procurement, companies have seen a shift from responsibility that rested solely with the Fleet Manager, to that of the Procurement Department. This in an attempt to encourage a more strategic procurement process, focusing on best practices that will not only enhance the lifecycle of the fleet, but also ensure long-term cost saving.

Strategic procurement brings an entirely different set of requirements to the decision-making process with regards to a company’s fleet. This means the Procurement Manager needs to consider a wide range of factors over and above the vehicles themselves, such as; tyres, fuel, insurance, maintenance and parts as well as the various types of support services offered by fleet service providers. This time-consuming process also requires a high level of collaboration between various company departments; from purchasing to the end user, and even fleet management, so that through the entire procurement process all bases are checked and the end product is something that is user-friendly, within budget and adhering to best practices for all parties involved.

But just how do you go about ensuring that your fleet is procured in a strategic way, ensuring best practices are observed? We take a look at the entire procurement process, from the initial planning stage to the actual purchasing (or leasing) of vehicles – and unpack the process that you should be following.

From strategic planning to RFP: collaboration is key

Once your company’s fleet manager has developed your fleet management strategy, the next stage of the lifecycle involves the actual fleet procurement. But where do you come in?

It is advisable that you are involved in the strategic planning phase, so as to give input on all options when it comes to financing the fleet (including lease, purchase and hire). You will also need to assess the current or past fleet arrangements that you have had in place, keeping in mind that previous arrangements may no longer be the best option. This, as budgets need to be calculated year-on-year as opposed to just incrementally adjusted each year – taking into account inflationary figures, maintenance costs, fuel price fluctuation and all in relation to the type of vehicle required. In other words, total-life operation costs. Important too, is to factor in the residual value of the vehicle at the end of its life. All of this planning needs to take place in collaboration with all parties before a request for proposal (RFP) is agreed upon. You can improve this process by:

  1. Forming a vehicle review committee: The committee should consist of representatives from all user departments as well as representatives from procurement, management, finance, and fleet. This will allow everyone input, therefore ensuring best practices are observed company-wide.
  2. Developing standardised forms: This will ensure ease of access to previous agreements, and continuity when it comes to future strategic planning.

The buying process: align to a partner who understands your needs

Once you know what your needs are, it is important to source a fleet partner that both understands, and can cater to these needs. Be sure that when comparing vendors you do a thorough check that what they are offering is actually within your lifecycle budget before you make the purchase. You can ensure this by:

  1. Comparing apples with apples: Ask yourself, why is fleet company A cheaper then B, is it because they cut back on maintenance or tyres, and will this mean you have to fork out extra cash in the long-term as opposed to being built into your agreement? Scrutinise the deal fully.
  2. Doing a fleet check: An important part in the final stages of the procurement process is checking your vehicles’ against certain performance-meeting criteria, ensuring that they meet your company’s best practices.

 

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