Tactics vs. Strategy: Applying both to your fleet
Let’s talk first about decision-making. Most business owners believe they make strategic decisions in their business, and some do. But my 30 years in the automotive business have taught me that, when it comes to vehicle fleet management, decisions tend to be more along the lines of reactionary and tactical. Business owners often use the same tactics when deciding which vehicles and how to buy them, over and over. The problem is, those tactics sometimes work, and sometimes don’t.
Strategy vs. Tactics
The Merriam-Webster dictionary definition of a Tactic is a) the science and art of disposing and manoeuvring forces in combat; or b) the art or skill of employing available means to accomplish an end. The definition of Strategy includes the science and art of employing the political, economic, psychological, and military forces of a nation or group of nations to afford the maximum support to adopted policies in peace or war; a careful plan or method: a clever stratagem; the art of devising or employing plans or stratagems toward a goal; an adaptation or complex of adaptations (as of behaviour, metabolism, or structure) that serves an important function in achieving evolutionary success.
What’s the difference for my business?
A strategy is an overarching plan that allows you to benefit from the (various) tactics you use. If you have a good strategy, the plan works even when particular tactics fail or no longer serve your best interests. If your business is growing year-over-year and you’re buying lots of vehicles, you may feel you’re doing it right. But with a clear-headed, long-term strategy, your decisions could be much more effective, especially for your bottom line. Let me give you one example of a typical tactic that misses the bigger picture.
One risky tactic: Focusing on the lowest price
Don’t get me wrong; the price you pay for vehicles and equipment is important. What I do all day long is negotiate, trying to reduce my clients’ initial purchase price for their new vehicles. But here’s where it becomes problematic: Say a business owner gets an unbelievable deal on a bunch of trucks. He is
so happy to get such a deal. The reason for purchasing these vehicles, in particular, was the lowest price. He searched everywhere, and nobody could beat this deal. After taking the new trucks’ delivery, the business owner discovers the trucks he bought have lower than expected payload capacity. The way the chassis and bodies were installed, they could never legally carry the size of loads he wanted them to.
With the lower payload rating for each truck, extra trips are necessary to move the same amount of material. These additional trips mean higher-than-expected operating costs. The drivers need to take more trips, burn more fuel, and expend more labour hours to do the job than driving the ‘more
expensive’ truck. Whenever something is significantly lower-priced than everything else in the market, be careful. Typically, though not always, you get what you pay for.
A strategy for success
I’m going to show you a proven strategy for managing your fleet. You can still use specific tactics if you like, and some will certainly work. Understanding that if you use the strategy laid out in this book, you won’t need to worry about the tactics so much.
The book is a guide to saving time and money and focusing on the essentials—the choices that matter. Ultimately, you want your business to run better, which is why you are reading this book in the first place. I wrote it to show my clients how to think long-term about their fleets. Not just about today’s decision, but how you will shape your business and become even more successful in the future. When I see waste and inefficiencies, it drives me crazy. I would rather see money spent on a better vehicle that increases profits rather than spent on wasted fuel or unneeded repairs. The benefits go all the way down the line: The recaptured resources can be allocated to improving the business and its bottom line. Your employees will now have better tools to work with. These better tools (new vehicles) mean better work, more efficiencies and satisfied happy customers. In the end, there is more profit for the owners. As a business owner myself, I know it would make me glad to have better vehicles and lower costs.