For optimal productivity, profitability and efficiency, you need to look into all cost-sensitive areas of your business. For instance, a simple replacement of a vehicle nearing the end of its useful life can boost productivity by a large margin. Also, as such assets age, so does the cost of ownership increase considering the increased need for maintenance and an inefficient fuel economy.
Picking the right time to purchase new service trucks or replace the old ones can be daunting at times, but you can always rely on lifecycle management practices to identify this time. Ideally, it can help you analyze the situation of your assets, and pinpoint the best decision forward.
Here are some more insights into service trucks lifecycle management and how to use it to your advantage:
What Is Asset Lifecycle Management?
Ideally, lifecycle management is the practice of being aware and accountable of all the nitty-gritty details of the lifetime of your fleet assets- from when you deploy a vehicle to the replacement period.
It helps to factor in all the costs related to the vehicle to come up with the cost of owning it. With enough attention to detail, you can use lifecycle management to determine cost-effective and suitable assets to include in your fleet.
Why It Should Matter
Every service truck or fleet vehicle has an optimum operating life. At this period, it performs at peak levels. Once this period is over, wear and tear can take a toll on the vehicle. In some cases, the costs of maintenance and repair might come to outweigh the cost of replacing the vehicle.
A lot of factors matter when determining the lifecycle of an asset- from the amount of usage to the effectiveness of its maintenance plan. If your asset is used more than the rest, then its replacement cycle needs to be more regular. If not replaced, you might also have to spend more on fuel to operate the car.
The Costs That Are Included In Lifecycle Management
For an accurate approach towards lifecycle management, you need to include all the costs associated with owning a vehicle. This includes the cost of tax, fuel, maintenance, repairs, downtime, and procurement. You should also factor in the depreciation of the vehicle since it still plays a pivotal role in remarketing it.
Any loss of productivity should also be considered as it affects income. It can be pretty easy for businesses to ignore the increase in costs that can be associated with a vehicle nearing the end of its lifecycle.
Sadly, you might focus too much on short-term fixes such as maintenance and repairs, whereas the cost-effective solution can be to decommission the asset and look for a more efficient model.
Use Flexible Lifecycle Management Policies
Ideally, you can base your asset lifecycle management policies on the anticipated resale value, the projected use, financing rates and the depreciation schedule of your vehicle.
However, as your business changes, so should your policies. You might need to use your fleet differently or even buy new assets, forcing you to abandon existing units early.
Also, other external factors can also have a significant influence on your policies, including legislation, fuel choices and availability of replacements.
For instance, if you would love to change the environmental impact your vehicles has by picking electric service trucks, you need to factor this into your asset lifecycle management plans. Be sure to leave some room for changes to create an amazing lifecycle management plan.
No penny should go to waste when managing your fleet. The more control you have over the intricate costs of owning your fleet, the easier it will be to improve on productivity, efficiency, and profitability. Contact Wilmar today to get asset lifecycle management insights or hire professional fleet managers.
