While the benefits of vendor consolidation can yield significant cost savings and process improvements, putting all your eggs in one basket can be daunting. Executives making these pivotal decisions risk putting their company’s success and careers on the line. With so much at stake, Amerit’s CEO, Dan Williams, has compiled a list of 5 tips essential for eliminating the risk and ensuring your success in choosing the right single-source fleet service provider.
- Closely examine vendor references.
- Start with a pilot, but make it challenging.
- Look for complete transparency and accountability.
- Look for a business partner, not just a vendor.
- Focus on areas of potential risk of failure.
CLOSELY EXAMINE VENDOR REFERENCES: Anyone can talk a good game, but the proof is in their track record. Look for vendors with long-term clients, excellent references that include national vendor consolidation programs, and a track record of success during and after implementation.
- Have they demonstrated seamless implementation, or did they stumble? Did they need help coming up to speed?
- Have they demonstrated the ability to hire and deploy hundreds of technicians for a multi-location customer?
- You also want to look at the results over time. Have they partnered with their clients to improve operations proactively and continuously? Can they save the client money year after year? What is the impact to the bottom line?
START WITH A PILOT, BUT DON’T MAKE IT TOO EASY: A pilot location should demonstrate the fleet service provider’s ability to consolidate and streamline services while improving quality and safety. Choosing several locations to start, including some that are challenging, will limit your risk while allowing you to see how well they perform.
When selecting pilot locations, keeping your ultimate solution in mind is helpful. If you need a national fleet maintenance solution, pick locations at several sites in different parts of the country. If recruiting may be an issue, select locations where your recruiters are being challenged today. Thinking through your risk areas and testing your selected partner’s ability to manage those risks will help give you confidence when you roll out the national maintenance program.
Remember that you can only realize the ultimate cost savings in consolidation with a plan to expand services if the pilot succeeds. Keep the momentum going by setting goals and defining success metrics for this pilot, and when those are met, move on to phase two with a well-defined sequential plan for further expansion.
LOOK FOR COMPLETE TRANSPARENCY AND ACCOUNTABILITY: You take the uncertainty out of the consolidation process by holding the fleet service provider accountable and requiring complete transparency. The more transparent the vendor is, the higher the confidence you should have in their ability to perform. At Amerit, we believe in tracking, measuring, and monitoring everything we do. Our client data portal offers real-time dashboards and reports of all our actions, findings, transactions, maintenance costs, and more.
LOOK FOR A BUSINESS PARTNER, NOT A VENDOR: Does the fleet service provider understand your industry and how streamlining maintenance operations can directly affect your profitability? Do they think strategically for both short- and long-term goals? Do you have a dedicated Account Manager who is the single point of contact for all your needs? Are they focusing on preventative maintenance and customer service?
When selecting a single source supplier, you want a true partner and ally, one that is committed to spotting trends, finding ways to increase your fleet’s uptime; safely and efficiency, and actively embracing your shifting needs and objectives.
FOCUS ON AREAS OF POTENTIAL RISK OF FAILURE: When selecting a fleet service provider, ask yourself, “What will cause this vendor to fail?”
Ability to hire technicians?
For a large national fleet, consolidation means streamlining operations quickly and having the ability to scale up or down in large volume. A company with a track record of scaling up quickly to accommodate your fleet size and fleet vehicles, with multiple technicians, is a must. Having an in-house recruiting arm creates focused dedication to other hiring requirements of each client. Amerit boasts a strong history of hiring hundreds of technicians for our national clients through our team of in-house recruiters.
Is there a thorough implementation process?
Implementing a world-class maintenance operation is always challenging. That’s why we recommend you require a detailed and thorough process. Amerit’s New Business Integration team (NBI) includes a large, cross-functional team of experts from each area of our company. The strength of these individuals is heightened when they come together as a team, governing not only their area of expertise but safeguarding the interactions of all facets of the program and fleet management.
Our implementation process is defined and driven by these four criteria:
- The process must be seamless- without disrupting the client’s operation.
- We must minimize risk – HR risk, safety risk, and mitigate workforce turnover.
- We must be fast – enabling maintenance and repair services to be fully operational in the least amount of time.
- We always conclude with a playbook – a living document that governs all processes, expectations, targets, and goals. The playbook is printed, bound, and delivered to each location and client contact, eliminating confusion and ensuring quality and transparency.
Conflict-free manager incentives and performance rewards across the country.
When consolidating your vendors, the ultimate goal is to have a consistent, uniform experience at all your locations nationwide. This is a high-stakes decision, so digging into how the fleet service provider rewards their management is essential to ensuring your success.
How are managers incentivized?
Many fleet service providers give incentives to their local managers based on their P&L. While a reasonably common practice, Amerit believes this can come with hidden conflict. For example, large customers are usually told they will be the number one priority of a provider’s company. Still, in an individual location, that big client may be a small part of that location’s revenue. When it comes time to make hard decisions about priorities and scheduling, we have seen countless instances where that local manager will protect their large, local customer and sacrifice the national client. Even though the local provider has clear direction from headquarters that the large company is strategically important, the manager will choose to protect his interest. This conflict exists anytime you have a locational P&L structure.
To avoid this conflict, you need to know how the individuals who do the work are motivated and held accountable and whether or not that is consistent with what you, the national partner, need. Amerit rewards managers based on performance metrics. The P&L is just one metric in that equation; our managers are compensated based on their performance metrics.
Conclusion: Up-front research helps guarantee success.
The task of consolidating maintenance vendors is a huge step that has the potential to increase your fleet’s uptime and cost savings dramatically. Breaking down the risk and making intelligent, informed decisions on how to commence will set you up for success.
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