New Selector Created 14% TCO Reduction for Food Manufacturer

Opportunity

A stale vehicle selector with models discontinued or in the process of being superseded by newer vehicles presented challenges for a large food manufacturer. The fleet averaged close to 100,000 miles and up to five years in age before replacement.

Drivers also paid a high personal use charge (PUC). Reflecting on these issues, driver satisfaction dropped.

Strategy

The replacement cycle shortened to 36 months/75,000 miles. For the selector, the team reviewed manufacturer presentations and inspected demo vehicles. Finalists were analyzed for total cost of ownership (TCO).

Ultimately, the winning vehicles were selected for multiple reasons: Drivers liked AWD in the snowbelt, the cargo-friendly option pleased former minivan owners, and the vehicles’ superior fuel economy and resale value lowered TCO.

Results+

With the new vehicles, operating cost per mile was lowered by 14%. Replacing the bulk of the fleet within nine months brought forward a large equity surplus. These savings made it feasible to cut the drivers’ PUC contribution by 20%.

Costs remained under control, the vehicles are safer and more dependable, and drivers are more satisfied.