What are the benefits of outsourcing fleet maintenance and management to a fleet management company? This is a question that many companies seek to answer.

There is enough evidence to suggest that outsourcing your fleet management and maintenance to an experienced and dedicated fleet management company has several benefits including reduced operating costs and overheads, increased efficiency, improved service and satisfaction and greater accuracy in documentation and reporting.

However, because each company’s operation is different, the decision to outsource should  be based on the specific defined benefits that outsourcing will bring to the company in general. Many companies outsource for the following reasons; cost savings, company culture, in-house expertise, core activities and the economic climate.

In-spite of all the benefits, It is important to recognise the potential downsides that outsourcing may also bring. But ultimately, it is a balancing act between maintaining some level of responsibility with a solution that benefits your company as a whole.

Advantages of Outsourcing Fleet Maintenance and Management

Outsourcing your fleet to an experienced fleet management company can be advantageous and help your business achieve a number of objectives such as:

Reduction in Operating Cost – Most companies are not aware of the total cost of managing and maintaining their fleet and cannot tell if they are over-paying on fleet maintenance. If you deal with fleet maintenance directly, then you could be paying over the odds for parts, labour and other expenses. But by outsourcing purchasing, management and maintenance to an industry specialist, you could make a significant savings. Specialist organisations will deal with suppliers on a daily basis and inevitably be able to get a much better deal. Some suppliers have special pricing and rates for fleet management companies which could ensure that you save cost on your fleet. Additionally, specialist fleet management companies have expertise and a few high-profile examples of fleet operation cost-cutting measures.  Outsourcing may even result in a reduced headcount, so other expenses relating to payroll, back-office functions and human resources can be reduced.

Improved Efficiency – Outsourcing key responsibilities to a dedicated organisation has the potential to transform productivity. By not having to worry about the burden of fleet management, both you and other members of staff will have much more time to concentrate on other important areas of the business. Experienced fleet management companies have the expertise to ensure that your fleet is efficiently managed. You will be rest assured that things like fleet availability, accident and licensing management and all other safety and operational requirements will be taken care of by dedicated and knowledgeable professionals.

Greater Accuracy and Reporting – A dedicated maintenance and management company will be able to analyse fleet metrics and establish Key Performance Indicators, which can lead to greater accuracy and ensure that measurable goals are set and performances measured against this indicators and success measured. Both financial and operational objectives relating to driver training, vehicle purchasing, ongoing costs, downtime and repair turnarounds can be constantly monitored and compared with other companies.

Assurance over Regulatory and Legal Requirements – From vehicle maintenance to driver eligibility, licensing and local authority licenses, roadworthy and insurance management the number of requirements and responsibilities that come with fleet management are somewhat endless. However, by outsourcing to a company with an absolute understanding of what is required, this accountability is minimized and may even disappear as a dedicated institution will be focused on ensuring all requirement are met and agreements for penalties signed for the outsourced company to bear all charges if they fail to ensure that the required regulatory and legal requirements. It is however important to ensure that the fleet management company in question is a legitimate and reputable management specialist.

Disadvantages of Outsourcing Fleet Maintenance and Management

Impact on Relationships with Employees and Suppliers – Based on the role of fleet managers, the develop very close relationship with vehicle users and drivers within the organization. If operations are kept in-house, then a driver can go to the manager directly with any questions, concerns or problems. However, if the fleet management is outsourced to a third-party, the relationship between the vehicle users and inhouse fleet manager because a little more complicated. Vehicle users will have to be contacting a third party for issues they might have. Furthermore, previous relationships between the in-house fleet manager and dealerships, suppliers, insurers etc may also suffer for the same reason stated above.

Loss of Knowledge and Continuous Learning – If the fleet maintenance and management is outsourced to a third party, there is a danger that previous insights, Knowledge and learnings as well as control over operations will be lost. It may therefore be difficult if at a future date the company would like to bring fleet management and maintenance back in house. Also, experienced staff within the fleet department may be absorbed into other departments and given new roles. This could lead to a loss of knowledge gained by these staff in the fleet department.

Issues with Accountability – Although the fleet management and maintenance functions may be outsourced to a third-party, an in-house fleet manager or employee will be ultimately responsible for every aspect of maintenance and management. The outsourced institution will have to be accountable to the in-house fleet manager or employee and all fleet reports must be sent to the officer. However, there is a possibility that in some cases when a complicated or difficult incident occurs, the in-house fleet manager or officer in charge of the fleet may pass the buck and  refuse to be accountable for the incident.

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