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 Case
Study - Mercury Helps Manufacturer
Streamline Fleet Operations and Save $1.35M
per year
The Client
Mercury’s client is one of the largest
manufacturers in the world. Headquartered in
Europe, the company has approximately 40,000
employees located on all five continents.
The North American operating entity employs
over 6,500 people at more than 250 locations
and operates a fleet of 2,800 vehicles in
the U.S. and about 300 vehicles in Canada.
Approximately 80 percent of the U.S. fleet
is comprised of trucks and the rest are
passenger automobiles. Trucks are replaced
between 48 to 60 months-in-service or 80,000
miles. Automobiles are replaced at 36
months-in-service or 75,000 miles. The
client was leasing vehicles from several
leasing companies and spending $31.4 million
per year for its North American fleet
operations.
The Challenge
Streamline the client’s fleet operations,
reduce costs, and establish consistent
processes and procedures at over 250
locations in the U.S. and Canada.
The Solution
Mercury Associates evaluated the client’s
fleet operations, costs, and leasing
alternatives, including fleet management
policies, procedures, and practices; vehicle
specifications, acquisition, replacement,
maintenance and remarketing; and management
analysis and information systems.
An important area of Mercury’s review was
analyzing vehicle operations by line
organizations—an important area of the
review since the manner in which vehicles
are operated has a great impact on the
overall performance and costs of the fleet
and on fleet-related liability exposure. The
review covered practices associated with
motor vehicle record checks; driver training
and risk assessment; and accident
procedures. Mercury’s services also included
the following:
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Defined bidder requirements and
standards in key service delivery
areas |
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Issued a request for proposal (RFP)
to qualified fleet management
companies |
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Conducted pre-bidding meetings |
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Established a level field for
bidders by designing a bidder price
quotation worksheet for each RFP
with a cost and service matrix-based
methodology for various combinations
of services to determine the
benefits of bundling services from a
single vendor |
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Identified key requirements and
related hard and soft costs for
terminating existing contracts and
starting new contracts
Defined compensation and payment
terms for the goods and services,
ensuring a fair and accurate
comparison of proposals submitted |
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Developed an evaluation tool to
measure technical specification
responses through a scoring
methodology based on the level of
importance to fleet operations |
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Developed a second evaluation tool
to measure bidder cost proposals and
quantify savings against current
baseline fleet operation costs |
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Evaluated the proposals submitted to
the client |
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Ranked all suppliers based on a
combination of price and service
offerings |
The Benefits
Based on the results of the bids received,
the company consolidated its fleet with a
sole supplier for leasing, maintenance
management, and fuel programs. The
successful bidder agreed to provide the
necessary full service programs and customer
service support.
Dealing with one supplier and a dedicated
customer service representative, the company
reduced overhead expenses for personnel and
eliminated the need to handle many functions
in-house, such as mailing fuel cards to
drivers. No changes were made to the
replacement or maintenance schedules as
these were not part of the project.
The company estimates that by implementing
Mercury Associates’ recommendations and
selecting a new vendor, the company saves
$1.35M annually in North America.
Contact us for a free initial
consultation
For more information on how Mercury
Associates can help you analyze your
contracts, develop RFPs, rightsize your
fleet and implement fleet management
information systems.
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