Trucks: The Total Lifecycle Asset Management Approach
At Bergey’s Truck Centers our product specialists have the opportunity to work closely with some of the largest truck fleets in the country. In doing so, our representatives get to see firsthand many of the best practices and disciplines those fleet operators utilize in their decision making process. Perhaps the biggest eye-opener is how many of the largest fleets look at the total life cycle of the truck as an asset as opposed to just the acquisition phase of the process.
In fact for many of these mega fleets, acquisition is just the start of the total life cost scenario. We believe it will be helpful to all of our customers – large and small – to consider this asset management approach as they look at trucks for their operation. Here are a few of the major points to the total lifecycle asset management approach to trucks.
- Be willing to challenge previous assumptions.Basically don’t always assume what you did in the past is always the best option for the future. Large fleet buyers constantly look at acquisition and operating strategies each time they consider new equipment. For example, in the past, many smaller truck operators traditionally tried to pay for 100 percent of their trucks in the shortest possible time and operate them for the longest possible time, when perhaps a fair market value lease could help them reduce monthly acquisition costs and lower operating costs during the time frame that the truck will operate most cost effectively in their operation. Of course each operation is different but what is important is that you work with a supplier who gains a thorough understanding of your operation and can point out the advantages of all the strategies at hand.
- Find the sweet spot.When you consider specific operational requirements, specifications, acquisition cost, financing, annual mileage and residual and mileage juncture that is best to replace the asset in your operation. Also consider changing conditions – don’t assume that the sweet spot in the past will be the same sweet spot in the future. Look at all the factors and always try to determine the asset’s sweet spot as it relates to your operation.
- Measure, measure, and re-measure.The largest fleets always measure operating parameters such as cost per mile, fuel economy, and downtime on a continuous basis throughout the operating life of the asset. Smaller fleets and single truck operators sometimes tend to only look at those measurements when buying the vehicle and when replacing it. The same goes for residual or market value. Many times there seems to be a buy it and try to forget it mindset that only changes with a large repair or a costly breakdown.
- Flexibility is highly desirable.When you adhere to the above best practices from the outset, you create the greatest amount of flexibility with your trucks throughout their forecasted life cycle. The more careful you are upfront, the more flexibility you have throughout the lifecycle.
- Change is constant.New technologies, changing government regulations, and a host of other unforeseen factors make it a constant challenge to operate trucks. For some truck operators change and uncertainty make full service leasing the best choice. Regardless of whether you choose to own or lease, taking the asset management approach to the vehicle’s total lifecycle pays dividends for fleet operators of all sizes.
- Acquisition is only the beginning of the process.Bergey’s is a supplier who can help you truly understand all of the finance and operational parameters and can provide the best total life cycle solution for your specific needs.