Cycling Strategies Eliminate Guesswork
Smart business owners constantly look for ways to ensure their companies are running at peak efficiency by establishing critical goals and objectives. For Powers Products, Inc., based in Denver, advance planning is particularly important when it comes to getting the best return on investment on one of their largest assets ? the company fleet.
How and when a company decides to acquire and dispose of vehicles in its fleet depends on many factors, such as time of year, mileage, vehicle type, age and maintenance history. Knowing when to dispose of older vehicles, a systematic process known in the fleet management industry as "cycling," eliminates the guesswork.
According to Enterprise Fleet Services, which specializes in providing fleet management solutions for businesses with 15-125 vehicles, sound planning and effective fleet management can help any size business better control the costs of owning and running a commercial fleet. From the financial benefits of leasing to achieving optimum vehicle performance and resale value by cycling, a tailored management program provides many advantages for businesses with small- to mid-size fleets.
Powers Products, Inc. is a 60-year-old subcontractor serving the commercial construction market in Colorado and Wyoming, including mason contractors, general contractors, architects and building owners. With a fleet of 38 vehicles, comprised mostly of three-quarter-ton pickups, the company began cycling vehicles about three years ago to get better control of lease rates, improve vehicle reliability, and lessen the amount of time spent internally on fleet management.
"When we owned our vehicles, we drove them into the ground. The extreme mileage led to high maintenance costs and vehicle downtime," says Steve Huck, Fleet Manager for Powers. "It also took a lot of administrative time to manage all the details. So as our company grew, it became more economically feasible to negotiate lease rates with one company and ensure the reliability of all vehicles by replacing them at appropriate intervals to achieve optimum performance and the best resale value," says Huck.
"Our cycling program with Enterprise looks at things like future trends, the current used vehicle market, warranties, mileage, and the potential wear and tear our business will inflict on each vehicle. Taking a detailed approach ensures we are not wasting our fleet dollars," says Huck. "This kind of in-depth analysis requires professionals who are experienced in fleet management."
The cycling program not only helps ensure Powers' employees are driving vehicles equipped with the latest equipment and safety features, it promotes the company's professional image when customers see modern, well-maintained vehicles. "No one wants to see you show up at a job site in the 'Jed Clampett' truck," Huck says.
He added that, in the construction industry, "where the schedule waits for no one," vehicle reliability is critical. That's why, for Powers Products' cycling program, planning ahead also means trying to predict business trends in the construction industry. "We can save a lot of money by ordering new vehicles direct from the factory, but the longer lead time required for ordering, about eight to 10 weeks, requires the ability to anticipate our business needs," says Huck. "Fortunately, we've been able to do this successfully."
The bottom line is that planning ahead, when it comes to both the makeup of a company's fleet and knowing when to acquire and dispose of vehicles, is an important component in helping companies with small- to mid-size fleets achieve strategic business objectives.
Enterprise Fleet Services, a division of Enterprise Rent-A-Car, is a full-service fleet management company for businesses with fleets between 15-125 vehicles. For more information, call toll-free (877) 23-FLEET or visit the company's web site at www.enterprise.com/fleets.
About the Author
Masonry, the official publication of the Mason Contractors Association of America, covers every aspect of the mason contractor profession - equipment and techniques, building codes and standards, business planning, promoting your business, legal issues and more. Read or subscribe to Masonry magazine at www.masonrymagazine.com.