Engineering Group Refined Its Vehicle Acquisition Process For Maximum Savings

Opportunity

This company has attained its position of leadership by addressing problems with a well-reasoned plan. When its own fleet needed the cost containment of a 10% reduction in trucks ordered from dealer stock, it designed the same kind of systematic solution for itself that it provides every day to others, with the help of Wheels.

Strategy

It historically bought trucks at the project or branch level on an ad hoc basis. Now, the fleet manager and Wheels set specific parameters for vehicle replacement: 60 months or 110,000 miles for light trucks, 72 months or 144,000 miles for medium-duty trucks. Applying these criteria, they identified 762 trucks as candidates to be replaced. They categorized the vehicles based on maintenance spending over $2,500, then used the revised list to place factory orders for 49 vehicles.

Reducing out-of-stock purchases was addressed through a surplus program. The fleet manager identified five of the largest locations and, following a standardized order template, factory-ordered six new trucks for each.

Results+

For every truck factory-ordered rather than buying from dealer stock, it saved an average of $5K. Ultimately, the team was able to reduce out-of-stock purchases by 30%. Upon resumption of normal mileage in a post-COVID world, those results project to an eventual yearly savings of $635K.