PROCUREMENT: Fleet's personal shoppers
02 October 2009
Slowly but surely, specialist companies are emerging that offer to take care of the hard work involved with acquiring a fleet. Tom Webster takes a look at the business of procurement outsourcing
The day-to-day running of a fleet throws up many problems. Administration, duty of care, organising short-term rentals, managing drivers and all those other issues that arise are a full-time job in itself.
But undoubtedly the single biggest undertaking for many firms is getting hold of vehicles in the first place, and some firms do not have the in-house personnel to deal with such a task.
However, there are increasingly more companies offering to step in and take away this headache by sourcing vehicles on your behalf.
The simple premise of what is called procurement outsourcing is that a third party acts as an agent or a middle man in the buying process. They will run the tendering process and find the best offers of leasing, fleet management or whatever else the client requires, and then recommend what they believe is the correct option. They will then negotiate and set up the appropriate contracts and hand back control of the newly acquired fleet to the company.
But is this worthwhile, and who would benefit from such a set-up?
Fleet consultancy Intelligent Fleet offers procurement as one of its services. Managing director Gerard Gornall says there are two key areas where it can offer benefits.
"In leasing you are buying a service rather than a product," says Gornall, who explains that the specific expertise of Intelligent Fleet enables clients to get the best deal possible.
The second area is the contracts. Gornall says large fleets need more than a standard contract, which is often all that leasing firms provide.
"We take the supplier's standard contract and suggest amendments to the supplier," he explains.
Gornall says he expects the whole procurement process to take up to three months in total, with Intelligent Fleet charging for between eight and 10 days' work in that time.
He adds that control is then handed back to the company's fleet manager or HR department.
By not offering any fleet management services, Gornall says his company is able to remain impartial, as, if it was offering such a service, then he may be tempted to recommend it.
Stewart Whyte of Fleet Audits says his company does the same, and also warns of any procurement company that offers 'free' advice. He says Fleet Audits takes a fee up-front so the customer knows what they are getting from the start.
Roddy Graham, the chairman of the Institute of Car Fleet Managers and commercial director of Leasedrive Velo has experience of both sides of the procurement process. He believes companies should exercise caution before employing an outsider to procure fleet services.
"Your first port of call should always be to your in-house staff before installing outsiders," says Graham. "Beware of people offering you the world."
Should you decide to outsource then Graham advises checking the quality of the company under consideration employing by speaking to their previous customers.
If the credentials are up to scratch then Graham states outsourcing can be a good thing. "We would always welcome knowledgeable experts at Leasedrive Velo," he says.
However, John Lewis, chief executive of the BVRLA, takes a different stance. "I can't see any good reason why a business would want to pay a significant fee to a third party when it can get a better deal working directly with a leasing company," he says.