Once you’ve made the decision to use an outside provider, you need to follow five key steps to ensure success.
Whether it’s due to the growing complexity in business or the increased competition, companies want to focus on their core business, leaving non-core functions to qualified third party providers. This is especially true in the area of transportation. With the cost of new equipment and new technology, the cost of training and retaining drivers and technicians, and just the overall cost of doing business, it makes more sense for companies to focus on their core business and use an outside provider for their transportation solutions.
Some companies may turn to full service leasing where equipment is leased and maintenance is part of the contract. Others may work with as-needed maintenance outsourcing. Some companies decide to outsource only specialized areas like tire work or refrigeration maintenance. There are multiple options available to companies that have transportation needs. It’s all about customization. You have this whole quiver of arrows, but you only use the ones you need.
But you can’t just go at this haphazardly. You need to have a plan, and you need to follow these five basic steps:
- Look inward. Before anything else, you need to identify a problem. If you’ve got personnel problems, what’s causing that? Are you not paying enough? You have to look at the where the issues are in your shop. Consider outsourcing specific problems that may be negatively affecting your productivity.
- Run the numbers. You can’t really go outside for assistance until you assess what your costs currently are. It’s not just the cost of owning vehicles and equipment; it’s overhead, employee training, parts inventory, even warranty work. Consider it all before you even begin talking to people.
- Look to technology. One of the key reasons fleets are concerned about outsourcing is because of potential downtime. But with new communication technology, information is shared quickly and with all the involved parties. That cuts downtime significantly and can easily make the outsourced maintenance as efficient as if you were handling it yourself.
- Find the right outsourcing partner. This seems like such an obvious point, but you’d be amazed at how often fleet managers don’t do their due diligence. Be specific about what you need so you know you’re getting the right match. Don’t be too fixated on price. If the cost seems too good to be true, it probably is. Remember, both sides have to make a profit.
- Manage your outsourcing program. This may not be as important if you have a full service leasing arrangement; although, even then, you need to monitor how progress is being made. But if you’re outsourcing just your maintenance, then it’s definitely not a one-and-done situation. You still have responsibility for managing the outsourcing process. You need to know that the agreed upon services and preventative maintenance are actually taking place, and at the agreed upon pricing.
If you’ve decided to contract your transportation with a third party provider, and if you follow these five essential steps, you could be well on your way to a successful relationship that will ultimately benefit your bottom line.
Learn how outsourcing your fleet maintenance can give you the freedom you need to focus on your core business.