Welcome back to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. This week, I’ll be reviewing a whitepaper entitled “EMERGE STRONGER: Identifying the Right Business Vehicle Strategy for the New Economy” from Runzheimer International and CFO.com.
In the early part of this millennium, fleet management was one of the new non-traditional categories that strategic sourcing became involved in. So, there is a chance that you are already involved in and comfortable with fleet procurement. Well, the rough economy of the last two years has compelled CFO’s to look at all areas of spend and question whether there is potential for cost savings and fleet management is no exception.
While traditional fleet decisions have been simple lease vs. buy or in-house vs. outsource, this whitepaper reveals that there are several different alternatives now being mulled by CFO’s. Those alternatives, primarily relating to non-complex vehicles such as those driven by sales representatives, include:
- Providing company vehicles to employees
- Providing flat-rate reimbursement to employees who use their own vehicles
- Providing per-mile reimbursement per IRS standards to employees who use their own vehicles
- Providing a combined fixed-and-variable-rate reimbursement to employees who use their own vehicles
What I found interesting and most valuable to procurement professionals are the various unique factors that are on CFOs’ minds when trying to decide the option that is best for their organizations. These factors range from the boost to employee morale of providing a company car to liability for death in a vehicle accident after work hours to the impact on working capital to tax implications to more.
Reading this whitepaper can be a good reminder to procurement professionals to question “what else is top management concerned about other than just cost?” So, whether you are directly involved in fleet procurement decisions, might eventually be involved in fleet decisions, or just want to learn some practices from another category that you might be able to apply to the categories you currently manage, I think that this whitepaper is a worthwhile read.
You can download your own copy of the whitepaper from CFO.com (registration required).
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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