It’s Time to Deeply Evaluate Your Operations
Originally appeared in Fleet Owner
With a recession likely coming later this year, the time to prepare is now. Take a deep dive into evaluating your operations, including asset utilization, parts management, and whether you can automate certain processes.
We are beginning to hear murmurs of a recession in the second or third quarter of the year. Most sources are saying they don’t think it will be a long or deep recession, but most agree there will be an economic slowdown.
While there is no need to panic, now might be a good time to perform a thorough analysis of your operation to look for signs of inefficiency that are costing you money. You need to determine what things are essential for your success and what things are good to have but could—if a recession does materialize—be cut back or eliminated.
A good place to begin is with your assets. Spend time evaluating asset utilization. You want to make sure that assets are not being over- or underutilized. Balance is what you should strive for. And given that most fleets are operating older assets, proper utilization takes on even more importance.
In the face of pandemic-related parts shortages, many fleets overbought replacement parts when they were able to find them. Review your parts inventory to see if there are excess parts you can return to your suppliers for credit. You’ll also want to look at the number of suppliers you are sourcing parts from.
Consolidating parts sources can result in savings from discounts and rebates for reaching certain spending levels. During the pandemic, many fleets went outside their normal channels to find parts and, as a result, likely lost some leverage from volume purchases. As supply chain issues are improving, consolidating spending once again may make sense.
Automation is also a way to reduce expenses, especially in the accounting department. If you have not already automated some of your routine processes, now is the time to explore your options and determine what your savings could be.
Your evaluation should look at every cost center to see if there are ways to improve efficiency, which should result in cost savings.
It’s best to perform this deep evaluation now so that if a downturn does happen, you’ll have a plan in place on how to effectively deal with it.
At Corcentric, we stand ready to help any fleet bridge that gap. To learn how we can help, contact Corcentric today.
Patrick Gaskins, Senior Vice President Fleet Solutions, Corcentric
Patrick Gaskins is a financial services professional serving the transportation industry for over 30 years. He began his career with Corcentric in 2010 as VP of Financial Services, was promoted to SVP of Sales and Operations, and is now taking on this new role, where he leads Corcentric’s Captial Equipment Solutions, Fleet Procurement, Supply Management, and Remarketing teams. Patrick brings to the Fleet practice his expertise in developing data-driven solutions to complex transportation transactions, driving efficiencies, and reducing expenses for Corcentric’s clients.