Buying for the Road Ahead

Develop written specifications for complete vehicle applications (including upfits). Written specifications ensure that the components painstakingly chosen by a fleet manager are installed on all of the company's vehicles. Without written specifications, fleets may receive different components, depending on which upfitter is assembling a particular vehicle. Putting specifications in writing also protects against ordering errors and makes it easier to order the next round of vehicles.

Standardize components. Standardizing components ensures continuity in vehicles, no matter which dealer or upfitter is used. Most upfitters have preferred brands, so if the fleet manager does not specify which brand to install, the brand used will vary depending on who is working on the truck. When fleet components are standardized, the number of parts the maintenance department has to keep in stock and the amount of training required for maintenance personnel is reduced. If a variety of lines are used, maintenance personnel have to learn how to work on all of them.

Don't automatically under-spec — or over-spec. Fleet managers who want to save every penny upfront tend to choose parts that result in the lowest possible initial cost. Those vehicles often perform poorly and have more downtime and higher maintenance costs. Other fleet managers try to avoid the “cheap” trap by buying the most heavy-duty components available, whether the application requires them or not. These over-designed vehicles generally cost more upfront and usually require the use of more expensive maintenance and repair components. Plus, the increased weight of those vehicles may reduce the payload they can carry, which can lead to a loss in productivity or the need to purchase a larger vehicle.

Identify vehicle requirements upfront, based on job requirements. The most important guideline to follow when spec'ing a vehicle is to optimize the components for the required application. Start by identifying the vehicle's basic functional requirements for the intended use. Then, consider additional features intended to increase productivity, reduce maintenance costs and improve operator comfort. Some of the parameters to consider include: net payload requirements; operating environment and conditions; operating and loading cycles; starting and reserve gradability; minimum desired road speed; towing requirements; special vocational requirements; maintenance environment; operator proficiency; and regulatory and contractual requirements. The requirements should be reviewed before each vehicle purchase to make sure they have not changed.

Consider life cycle costs. A vehicle that has been optimized for its intended application will provide the lowest overall lifetime cost of ownership when all factors are considered. The primary factors affecting life cycle costs are initial purchase price, long-term operating and maintenance costs, vehicle productivity, and resale or salvage value. When evaluating the cost-to-benefit value for any component, a business should consider the time value of money and the effect of taxes on cash flow. This can be accomplished by using a basic after-tax net present value analysis.