In the past, if someone who was looking to purchase new fleet equipment was asked, “What is the main factor that you consider when making a purchase?” the answer would be consistent: budget. You forecast the equipment that you need but always come back to what you can afford when making a final spending decision.
Budget will always be an issue, but in the past few years, the supply chain has become another factor that is almost as impactful. You face the challenge of knowing not only what you want to order but also when you can receive the fleet equipment.
Planning and managing around the supply chain
Your ability to manage supply chain issues has become a complex guessing game. Delay upon delay stack up, creating delivery times that are three or four times what they were a few years ago. You see delivery dates as moving targets, which impacts the entire process. Niches like fleet equipment don’t make your job any easier. Specialized equipment is just that—specialized.
As inventories have dwindled and suppliers have turned to creative options to solve these problems, you will find that not all vendors have the same experience themselves because the reasons for the delays are all over the place. One might see delays due to a lack of available parts, while another has the parts but needs drivers to deliver them.
You probably don’t think of these as new problems, but you might not have considered certain solutions. You have at least two options for how to procure your fleet equipment. Learning the impact of each will leads to better decisions for your organization.
Bid process and cooperative agreements
Of the two options, the bid process is probably the one that you probably know best.
The traditional bid process includes lead time when developing specs for the bid. But the last thing that you want to do is add more time to your process, given that delivery times will be extended. Also, when doing traditional bids, you might settle for the low bid and move forward as quickly as possible, but that’s not always the best practice when it comes to fiscal responsibility and getting what you need. According to a 2021 study, 45% of Americans surveyed reported feeling anxiety regarding supply chain disruptions. Nervous minds do not typically make the best decisions, so any tools that can decrease this anxiety should be used.
Cooperative purchasing agreements provide you and your team an alternate avenue for making these decisions in a clearer way that removes some of the guesswork. How does this work? The cooperative offers options and pricing at the front end, and knowledge of the estimated delivery date is clear from the start. This does not remove the supply chain issues necessarily, but it does enable you to budget and plan around them. If there is pressure to get equipment ordered by a certain time—ordering snow-removal equipment for the upcoming season, for example—the pressure of delivery is present and real. Using a cooperative gives you the confidence of knowing where the process stands along the way.
Since cooperatives provide volume pricing, the costs are typically lower. For you to have these lower costs, informed decisions, and less pressure to move quickly, you need to use cooperatives as the perfect solution to supply chain issues and wise budgeting.
Know that creating cooperatives happens easily and quickly with the right partner. The guidelines for these agreements differ from state to state, but if you partner with the right group, even highly specialized fleet equipment can be added to purchasing agreements for you to access. For most public entities, their fleet equipment is one of their most valuable assets; every penny counts, as does every minute saved. You save both by using a cooperative to procure your next fleet.
Here at Sourcewell, we help public agency buyers procure fleet vehicles faster by fulfilling the time-consuming bid process for them. Through cooperative contracts, we expedite the fleet vehicle procurement process so you can better serve your teams.
Want a faster procurement process? Contact one of our specialists today to buy the fleet solutions you need!