The Total Cost of Ownership (TCO) has become a crucial metric for fleet managers, particularly for essential operational vehicles such as aerial work platforms. In today’s cost-conscious environment, where cost reduction is the primary objective for most procurement departments, a critical question arises: how can we optimize the budget for aerial work platform vehicles?
What is TCO?
TCO (Total Cost of Ownership) encompasses all costs associated with owning and operating a fleet. Reducing TCO is one of the key strategies adopted by procurement teams to create value.
- 75% of TCO is directly related to the vehicle: purchase cost, total energy consumption, financing fees, depreciation, mandatory maintenance costs, etc.
- 20% is linked to operator usage: fuel consumption, repair costs…
- 5% depends on internal fleet management.
To reduce these costs, there are four main optimization levers:
1. Selecting the Right Platform on the Right Vehicle
It is essential to choose aerial work platforms that best match operators’ needs based on their usage, while opting for economical and energy-efficient models. Note: “economical” does not mean “low-end”! A newer, more efficient, and less fuel-consuming model may have a higher upfront cost but will prove more cost-effective in the long run, especially since fuel consumption accounts for an average of 15% of TCO.
2. Negotiating a Comprehensive Contract
Once the products are made available to operators and their purchase cost is negotiated, it is equally important to account for additional expenses such as maintenance and repairs. For aerial work platforms, a LOLER (Periodic Thorough Inspection) is mandatory every 6 months in France. Therefore, it is crucial to select a provider capable of including these services in the master agreement and to negotiate overall costs for better budget predictability. Delivery logistics should also be considered to streamline operations and ensure quick access to ordered products.
3. Communicating the Contract Terms
To ensure all company sites or branches select from the negotiated product list, it is vital to promote the new master agreement. Here are some proven communication strategies:
- On-site demonstrations at key locations
- A targeted outreach campaign for site managers
- A broader awareness initiative: emails, customized catalogs showcasing the offerings and associated services
These efforts should be carried out in collaboration with the provider to encourage adoption and proper use of the selected solutions.
4. Engaging Teams in the TCO Strategy
Another key factor in TCO optimization is the proper use of aerial work platforms: well-trained employees will maximize equipment efficiency and avoid unnecessary repairs.
Additionally, promoting eco-driving practices can help reduce fuel expenses and minimize accident-prone behaviors.
By implementing these four strategies—selecting the right equipment, negotiating comprehensive contracts, ensuring internal compliance, and training teams—companies can effectively optimize their TCO for aerial work platform fleets, achieving both cost savings and operational efficiency.
Would you like to explore a customized TCO analysis for your fleet? Let’s discuss how to further enhance your budget optimization!
