Multinational corporations are changing the way they source and manage their vocational fleets to better identify true costs and to leverage opportunities to reduce spend and to maximize the operating efficiency of these specialized vehicles.
Over the decades, procurement has become more and more involved in sourcing fleet assets. Initially, procurement started with lower-hanging fruit, primarily company cars, but have gone further up the asset chain in sourcing more complex vocational fleet vehicles; however, this has proven to be more challenging. For instance, the upfitting spend for vocational fleets is more complex because its specialized equipment is harder to commoditize.
Frequently, upfitters and vehicle conversion companies are not global or even multi-regional operations, so it continues to be a local discussion with local suppliers. The vehicle conversion supply chain varies by region. While sourcing drives the conversation, the local fleet decision-makers are key players because they know the local upfitters and truck OEMs.
Vocational Trucks Are Earning Assets
Sourcing managers view work trucks as earning assets and to maximize their productivity, vehicle sourcing requirements are defined by the fleet application and mission requirements. Without fully understanding the fleet application requirements and operating parameters, it is impossible to source the best chassis, powertrain, and body necessary to optimize productivity.
When managing assets on a global basis, it is important to identify best practices among regional operations and start applying these practices to other markets where you operate. The reality is that regional vocational fleets in the same organizations are often isolated from each other and unaware of operational efficiencies occurring elsewhere. Although they are the same company, there is generally no sharing of information. When you eliminate these information silos, a fleet manager has the potential to add recognizable value to the whole organization.
How you adopt these best practices will give better control of your complex fleet, which will generate the ongoing cost savings. Depending on the expense of the upfitting, it is sometimes worth more than the vehicle itself. If the equipment is not optimal to the application, it will have a huge impact on your business. When managing a globally dispersed fleet, there are critical variables in sourcing a vocational truck critical factors that will vary region-by-region.
Understanding the Complexity of Managing Vocational Fleets in Europe: The term “upfitter” is primarily used in North America and not so much in Europe, which tends to use terms such as LCV converter or LCV multi-specialist manufacturer, with LCV standing for light commercial vehicle. In Europe, fleets have a strong relationship with their conversion companies, which primarily service fleets in a specific country market.
However, there are major pan-European LCV converters, such as Fraikin and Gruau, which, in addition to selling direct to large fleets, have a strong clientele among European OEMs and dealers selling specialized equipment for unique fleet applications. In addition, a significant amount of LCV conversions are done by dealers for their local fleet customers. LCV conversions vary by country since there is no pan-European industry standard.
Many pan-European fleets have complex needs due to regulations that differ by country and in some instances, such as Germany, the vehicle conversion market is highly regulated. Vehicle converters face a complicated procedure to ensure the conversion of LCVs into dropsides, tippers, or refrigerated units to achieve regulatory requirements such as WLTP homologation, which stands for “world harmonized light-duty vehicles test procedure.” All new LCVs must be WLTP homologated to provide buyers with more accurate fuel consumption and emissions information. Where problems arise is in the WLTP testing of third-party conversions. Each of these models needs its own WLTP figures to comply with the regulations.
Managing Vocational Fleets in South Africa and Sub Saharan Africa: When operating complex, vocational fleets across the African continent, vehicle maintenance presents a key challenge because of the inadequate service infrastructure. In South Africa, some fleet management companies operate specialized upfitting businesses that provide a full package integrated solution.
Strategies to Optimize Lifecycle TCO in Latin America: The two largest fleet markets in Latin America are Mexico and Brazil. There are unique needs of vocational fleets in each market, such as vehicle spec’ing, decaling, maintenance management, and asset disposal at the end of a vehicle’s service life. In Mexico and Latin America, the supply chain is different than in North America.
The region has a limited network of upfitting companies. In Latin America, it is not uncommon for manufacturers to do some of the upfitting, which is not always the most efficient way to do it because it’s not their core competency.
Best Practices in Operating a Vocational Fleet in North America: There are many similarities between U.S. and Canadian fleet markets in managing the upfit of fleet chassis by using ship-thru networks, drop-ships, or bailment pools.
There are extensive upfit options available to fleets. Over the years, upfitters have been creating greater efficiencies in their production processes. with particular emphasis on enhancing safety, ergonomics, productivity, sustainability, and lightweighting to maximize a chassis fuel economy.
If you want to learn how to better manage a multi-regional vocational fleet, the Global Fleet Experience virtual conference, held on May 4-27, 2021, will examine regional best practices around the globe in the management of these complex fleets.
You can find more information about the 2021 Global Fleet Experience virtual conference at www.globalfleetconference.com.
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Originally posted on Automotive Fleet