New Vehicle Ordering
ARI worked with a large energy client to streamline the vehicle ordering process, slash order-to-delivery times, and reduce costs.
Energy customer’s portfolio includes regulated energy businesses that employ more than 8,000 people to provide natural gas transmission, storage and distribution, as well as electric generation, transmission and distribution to nearly four million customers located throughout the high-demand energy corridor that stretches from the U.S. Gulf Coast through the Midwest to New England. The utility’s job-worthy trucks that deliver skilled crews and specialized tools wherever and whenever needed are critical business assets. In that regard, the customer’s fleet team prioritizes process management to ensure that the acquisition of vehicles supports the company’s commitment to its customers 24/7.
The fleet team’s vehicle order request and approval process was thorough, but in time they determined it needed streamlining. The process involved multiple databases: one for vehicle specs and another for aftermarket equipment. When orders were submitted, they traveled through a number of systems but then transitioned to a few manual steps for order approval. Approved orders were once again keyed back into the database by the fleet team who also manually entered them into the ordering system for transmission to the manufacturer. The team then placed aftermarket equipment selections on a spreadsheet and sent them to the upfit company. The process, which averaged 8 to 11 months, could occasionally set back the company by missing preferred pricing opportunities and production cut-off dates, which delayed delivery of vehicles to the customer’s field teams.
Working with its fleet management company (FMC), the customer evaluated the opportunity to implement an advanced system that would completely automate its order requests and approvals. Together, the companies aligned each step of the existing process with the tools available in the FMC’s online fleet management system, including standardized vehicle specs that met job requirements while minimizing acquisition costs, electronic listing of selectors, automated approval routing, electronic order placement, negotiated pricing based on anticipated volume and scheduling, and an ordering schedule that met all manufacturer build-out dates and allowed for priority build dates with upfit companies.
$39,000 reduction in administrative cost.
$339,000 in ancillary savings relative to maintenance and fuel expenses.
$378,000 in total savings by automating order requests and approvals process.
Projected Savings/ Benefits and Results to Date
In the first quarter of 2013, the fleet team had already placed 81% of the vehicle orders for the year. Overall, vehicles were delivered 3.5 months sooner with the assistance of the FMC compared to 2012—and the customer achieved record results in regard to fleet productivity and support of its company’s mission to deliver safe, reliable natural gas and electricity. By the end of the third quarter of 2013, the client reduced administrative costs by $39,000 as the amount of manual work diminished. Ancillary savings of $339,000 were achieved relative to maintenance and fuel expenses. (Older vehicles are less fuel efficient and require more frequent and higher-priced maintenance than newer vehicles.) In total, the company saved $378,000 by automating its order requests and approvals process and by taking older vehicles out of service.
Moving forward, the steps in place to continually review fleet vehicle applications and needs will produce sustained savings for the company in regard to acquisition and operating expenses and also strengthen the status of the customer’ fleet team as a world class fleet.
Vehicle Specification Review
ARI’s Strategic Consulting team helps client determine how the different types of vehicles in the fleet were being used, managed, and maintained.