Active fleet management: Are you going the distance?

Active-Fleet-ManagementAt TFS, we talk to a lot of companies about material handling. What we’ve found is that most businesses don’t even realize they’re not actively managing their forklift fleets and facilities.

Yes, it’s absolutely true that most are doing some sort of management, but when we crunch the numbers to demonstrate how much money they’re leaving on the table, they’re stunned.

That’s because active fleet management means more than just dealing with a vendor to choose forklifts and negotiate a monthly payment.

There’s an art to active fleet management. And let’s face it: material handling teams are usually already stretched to their limits. They don’t have the time or personnel to tackle equipment sourcing, leasing, maintenance, and telematics and data management in-house—let alone build a roadmap for future optimization.

“A lot of clients will say they’re actively managing their forklift fleet, but what we’ve learned over time is that each might have a different definition and no one really has the time or manpower to go the full distance,” said Tom Ryder, Chief Commercial Officer with TFS.

For some, he continues, active fleet management simply means they know how many assets they have and what leasing terms they’re under. For others, it could mean they assigned someone on the team to keep a file on each piece of equipment and what repairs have been made.

These are all elements of active fleet management but are only part of a much larger and holistic approach which relies on real-time fleet usage and maintenance data to inform leasing and maintenance programs that best meet the organization’s needs and budget.

“Fleet management is also a very fluid process,” said Ryder. “Conditions change. Operations evolve. For TFS, part of active fleet management is coming into the physical location, going over the fleet activity data, and determining what the client needs at that point in time. The next part, though, is keeping an eye on all the factors that can impact fleet requirements and using data to actively help clients adjust in real-time to make the best decisions for their operations whenever it is necessary.”

An automotive analogy

To better understand the advantages of active fleet management and the benefits of entrusting the process to an experienced third-party, think of it like buying a car, according to Chad Hoffman, Vice President of Sales, OnPoint Capital.

“Usually what happens is we go to a dealership, pick a car out, and let the salesperson convince us that we need all the options they say we need. Then, we sit in an office discussing finances before landing on numbers that make sense to us and send that to the bank where they run credit checks to make sure we can pay them back,” said Hoffman. “Now imagine bringing a car-buying expert along for a fee and having someone by your side who can say, ‘This is the car you should probably get based on what I know about your driving habits and preferences, this is the payment term that works best for your needs, and here’s where I would get your car repaired based on the model and your tendencies.”

“Now take that one step further,” Hoffman continued. “Imagine that same car-buying expert coming to you after everything is said and done and saying, ‘All the advice I’m offering will also lead to a lower cost per month.’ That’s what TFS does with fleet management.”

Case in point

Providing clients with holistic and dynamic active fleet management is TFS’s specialty. Over the years, it has put this skill to practice for clients of various sizes and industries.

“A good example would be our work with a major tire company,” says Ryder. “Before TFS started working with them, they would go to their two or three OEM forklift suppliers and say, ‘We’re going to buy 100 assets this year. We don’t know when they’re going to come in, their exact cost, exact specification, or how we’re going to use them, but we do know we want 100 trucks.”

In this example, the client would bring their quotes from the OEMs to two lessors and request a specific payment period. That’s when the lessors would go back, chat behind closed doors, and come back with their offer knowing that the equipment was always returned totally spent. One of the lessors would choose to take the contract, price it according to the heavy use, and provide a rate. The client felt that having a contract was managing their fleet—but when they learned about active fleet management, they realized they could be increasing their uptime and saving money.

Partnering with TFS meant managing their fleet—across all locations—based on data. Once on board, TFS’s team visited each of the client’s locations to do a power assessment, then developed an optimized leasing and maintenance plan. Next, TFS actively managed the client’s assets to ensure its plan stayed on track, making adjustments when and where necessary.

“That’s the beauty of active management,” Ryder says. “If we’re tracking all the maintenance and utilization expenses and providing that data to our clients in monthly, quarterly or annual reports, then we can also use that data to provide intel on what kind of decision-making we should be doing.”

Visibility counts

Active fleet management is more than keeping equipment on the floor until it can’t run anymore. It’s about keeping day-to-day operations running smoothly while anticipating a company’s future needs and finding the assets and leasing deals to match.

“Just providing that visibility in what our clients have, what it’s costing them, and how their lease terms are impacting their finances is a huge revelation for a lot of companies,” says Hoffman, “But that’s all part of what it means to be actively managing your fleet.”

After all, material handling is often one of the top five costs for a business. Active forklift fleet management reduces those costs while improving your uptime and building a roadmap for the future. And let’s face it—the last few years have been turbulent and that trend shows no sign of slowing down. Doesn’t your company need every advantage?