10 reasons to invest time in an asset management plan

Asset management is an invaluable tool when it comes to the efficiency of your fleet operation…

Read our top 10 reasons to invest time in creating and implementing a comprehensive plan

Does your organization have an asset management plan? If it’s not already on your radar, asset management is the concept that you can gain a complete understanding of the way your fleet operates by simply collecting and analyzing data on everything from the acquisition, operation and cost of each individual asset.

While whole lifecycle cost predictions are useful, asset management is a step further, turning those predicted figures into reality and analyzing them to see where strengths and weaknesses lie in your business.

Making sense of the data, however, requires advanced software, but once you’ve drilled down to see how your fleet is working, you can set about making changes that could positively impact your business as a whole.

Not convinced?

Here’s our top 10 reasons to get started on that all-important asset management plan:

Alternatively, find out more about what Asset Management is all about.

1. It will provide a comprehensive overview of how much your vehicles cost to buy

Asset management allows you to analyze the true cost of vehicles – not just in terms of their front end, but relative to the funding required to buy them versus the amount of time they will be used.

It’s all very well buying vehicles with a low front end price or monthly rental, but if they have a lot of problems and spend a lot of time off-road, those initial savings will be negated.

Implementing a comprehensive asset management plan will allow you to analyze the lifecycle of your vehicles, which in turn will indicate whether they are a cost-effective solution. The ability to analyze where an asset is in the lifecycle allows you to consider the necessary actions that need to be taken to manage costs and reduce risk.

2. It can minimize downtime

Downtime is one of the most difficult asset management challenges in the fleet sector, mainly because it is extremely hard to assign time and cost to very specific problems.

According to various published reports, automotive manufacturing can suffer from downtime losses amounting to $1.3 million per hour.

In this line, asset management can be revelatory because it pulls together a wealth of important data that will allow you to analyze how long vehicles are off-the-road, look for associated trends and assign costs.

So, if a lot of vehicles are out-of-action due to specific parts failures, or drivers are having repeated types of prangs, you should look to check:

• The way each vehicle is driven
• For endemic wear issues at regular services to get ahead of problems
• Ways to rectify issues before they become terminal

3. You’ll gain a full understanding of service and maintenance costs

With an asset management plan, you can drill down into the price of parts and labor, as well as how long services and repairs take.

On doing so, you will get a better understanding of which suppliers are doing a great job and which are inconsistent, charging too much and taking too long either sourcing parts or undertaking the necessary work.

You’ll then be able to hold them to account, ensure consistency and make considerable savings.

4. An asset management plan can help you with compliance

This is especially important if you operate commercial vehicles – although driver license checking and servicing is still relevant for cars – and even more so if you have your fleet spread out across a number of depots.

Fleet asset management software create reports that highlight whether your drivers and managers have completed the relevant paperwork and checks, and these can then be housed centrally so there should be no nasty surprises.

5. You can understand and monitor the whole lifecycle costs of vehicles

The great thing about asset management is that you have actionable information at your fingertips, which allows you to make data-led decisions.

There is no conjecture about whether one vehicle is better or worse for your business than another: you will have reports which spell it out at a granular level, from the cost of purchase to tax burdens; utilization; SMR and defleeting costs.

6. It will give you insight into how your business could improve

Managing vehicles is the core function of asset management, but another upside is that it gives you a view of how your business operates. You will be able to see:

• How long your employees are working for and where
• If time is being wasted getting to sites or delivering goods
• Whether work is being carried out efficiently
• If certain areas of the business are operating better than others

Your vehicles are the heartbeat of your company, and asset management will show whether that heartbeat is strong, allowing you to address issues and allocate resource where it is most needed.

7. You will remarket your de-fleeted vehicles more effectively 

Because you have looked after your vehicles from day one, ensured drivers and managers inspect them regularly, have complete records and have headed off problems before they have occurred, your vehicles should be in a good condition come de-fleet time.

You will also have a great understanding of mileage parameters too, so there should be fewer unexpected wear and tear issues and end-of-contract charges.

8. Your employees will work more efficiently and safely

Asset management puts in place processes, which means employees can be monitored for fuel costs and risk, allowing you to see who is regularly involved in incidents, ensure licenses are valid and up-to-date and that each individual is driving as efficiently as possible too.

9. It can lower insurance costs

Insurance companies want data and certainty: a company with a full asset management programme can demonstrate it has total control of its fleet and drivers, which will in turn drive down premiums.

10. It can draw together a large, disparate fleet

If your fleet is based at a number of different sites, it is just not possible to physically keep an eye on every vehicle.

The data drawn from an asset management programme gives you that overview, and the reporting structures gives peace of mind that vehicles are being serviced, checked and looked after, wherever they are.

It’s also worth remembering that asset management doesn’t just apply to cars and vans – a good system can also be adapted for all sorts of machinery, from plant to groundskeeping equipment.

The same rules apply: if it costs you money to run, then running it better and looking after it should save you money.