Out with the Old, in with the New
Tendering for new fleet suppliers is a necessary process for most larger organisations and can deliver substantial savings opportunities.
Most procurement professionals tasked with going to market for leasing services will have had their eyes on a substantial prize at some point, whether it be through direct lease cost savings, new business incentives or even just a more focused supply chain.
Sometimes the challenges come not from getting the deal on the table, but from what to do about getting this deal accepted and then, importantly, delivered across the business.
Internally, instinct will be telling the key stakeholders that this will mean a whole lot of work for them and their teams as they will have to manage more relationships, educate a new supplier in the workings and the culture of the business and deal with additional sets of management information.
Additional complexity is a difficult sell in modern businesses whose natural instinct is to focus on core activities.
Be Careful: There’s Knives Around
The other key challenge comes with managing in the new and managing out the old supplier(s).
The core issue is that with vehicle leases, you are tied to that supplier until the lease ends, which could be 4 years hence.
It’s like getting divorced but sharing the kitchen with your ex for the next 4 years; it’s going to be sometimes less than helpful, pretty tense and you’ve got to be careful, because there are knives around!
The ‘knives’ in this case are the variable cost factors that will be brought into play to ‘max out’ the profit opportunities for the outgoing supplier(s).
The new supplier will be excited to get up and running with your new business and will undoubtedly resource the implementation, and provide a plan and personnel to support process integration.
Unfortunately there is little they can do to support the removal of the old supplier – it’s like introducing your new spouse in the kitchen scenario – basic compliance is the best that can be expected but it’s likely to end up in tears!
It would be fair to say that the broader the reach of the fleet and the more entrenched the supply chain, the greater the pain of change that will be experienced.
This is particularly true of ‘outsourced’ solutions where little or no internal resource retains responsibilities for daily activities – where it becomes difficult to merely lift away activities from the outgoing supplier through transition.
Let us Ease the Pain of Change
It is not uncommon for fleet tendering projects to fail to result in change.
This is not because substantial savings could not be achieved or service vastly improved, but because the anticipated ‘Pain of Change’ was not palatable to key stakeholders in the business, or those stakeholders could not perceive how the roll-out could happen without severe business disruption.
Fleetworx can significantly reduce that pain of change through a carefully managed fleet transition process.
We provide expertise, systems and resource at the right point and in the right amount throughout the transition period, until such time as a full handover to the new supply chain can be achieved.
For more information about how Fleetwox can support your car fleet transition programme download the free ebook “Transitioning Car Fleet Supply. Get the reward you were promised”