AC Environment: comprehensive TCO

“Each manager can choose the cost items he wants to include in the calculation of the TCO of his fleet, reminds Marc Chavallar from the beginning for the company AC Environnement, which specializes in real estate diagnostics. But to effectively compare this TCO over the years, it’s important to keep the same positions.” This purchasing and logistics manager is also responsible for managing a fleet of 500 vehicles. But while the TCO calculation can really remain organization-specific, all companies have one thing in common: TCOs are rising. How to maintain the level of spending on the fleet item in this context, which does not offer any improvement prospects in 2023?

Map costs

AC Environnement answers this question primarily with a precise knowledge of the costs associated with the operation of its fleet. An important prerequisite for dealing with each of these costs. As part of the overall management of all AC Environnement purchases, Marc Chavallard therefore annually “maps” all cost categories, including fleet and therefore TCO. “This family has several sub-families: rent, fuel, tax, insurance, maintenance, etc. » This lists the purchasing manager.

And with the goal of reducing costs, Marc Chavallard targets consistent measures for each subfamily. “For each, a fleet manager and buyer work to optimize costs,” he says. Targeted measures made possible by the option of managing various cost items outside of lessor contracts, which finance a good part of the fleet. At most 500 cars operate at LLD, plus around fifty 2-seater Clios and Twingos at LOA. “However, when I took office in 2016, the first initiative to create short-term savings was to remove insurance and tires from rental contracts. For the wheels, we applied for the Euromaster mark and went through a broker for insurance,” says Marc Chavallard.

In 2023, the actions envisaged for the cost items allow to project the overall goal of reducing fleet costs. “We want to reduce these costs by using all possible levers and aim to earn 150,000-200,000 euros,” says Marc Chavallard. A number of measures have already been completed.

Gas station

The reduction of fuel costs was achieved through a number of initiatives, such as limiting the use of vehicles on weekends. “We also changed our fuel card provider,” continues this manager. We were at TotalEnergies until now. After applying to several actors, we chose DKV. With this service provider’s card, drivers were able to access a larger network than the TotalEnergies network. “The card provides access to the “low-cost” network. We also have an interesting reporting system and a lower card price with volume discounts,” adds Marc Chavallard.

restitution, optimization arm

AC Environnement looked at restoration costs after noting the high sums demanded by rental companies. Initially, action on these costs resulted in reporting these costs to the various agencies of the group so that they could flag any abuses. “But now I expect the tenants to return. We realized that delegating responsibility for recovery to an agency far from head office was not an efficient enough solution: it took time and we had no idea of the cost of recovery. Marc Chavallard. That is why we have chosen to return vehicles centrally with a very strict process. »

When the car arrives, it is thus directed to the recovery center. Macadam takes stock of the situation. And after this calculation, the three professionals involved in the site: a mechanic, a bodybuilder and a bodybuilder, work together with the imperative to carry out the necessary repairs to reduce the value of the Macadam by at least 30%. “Today, recovery is done quickly, between ten and fifteen days. Three professionals are experienced and know how to repair to reduce this number,” says Marc Chavallard. The savings achieved are not burdened by the initial expertise costs, which remain low: “The cost of an expert from two vehicles varies between 35-40 euros for each vehicle, and travel expenses are not counted,” adds this purchasing manager.

Reduce mileage

The goal of savings should also be achieved by reducing the number of kilometers traveled by vehicles. “We aim to cut 300 km per month,” continues this manager. This lower mileage level was announced primarily to make employees aware of the relationship between distances traveled and costs. “It’s a goal we’ve set for ourselves and is measurable thanks to feedback from telematics and fuel cards. Above all, it is a matter of reporting the actual profits to each profit center,” explains Marc Chavallard.

This measure is the first step for better control of planned employee travel by creating a mobility management service. This should happen in 2023 at AC Environnement. “The mobility management service will take into account the costs associated with the use of vehicles and add to it all the travel costs of employees: hotels, flights, etc. Thus, we will be able to determine the TCM (Total Cost of Mobility) for each employee [encore plus global qu’un TCO, NDLR], the AC Environment manager continues. The goal is to better identify travel that is needed or not and to better control all travel costs.”

Towards mobility management

It is also planned to provide tools to support employees in choosing the best travel methods for the same trip. This goal will go through an interface that will provide information on the vehicles TCO per kilometer traveled compared to the cost of other modes of transportation. “In 2023, it will be important to implement these tools,” said Marc Chavallard.

These changes in travel patterns will go hand in hand with adapting fleet management: the size and nature of the fleet, the terms of lease agreements, etc. to change. Developments are going well. Due to the main energy transition of the park, as well as the recent failures of the developers, Marc Chavallard has already questioned the well-established commercial practices.

“Three years ago, we had three rental companies: ALD Automotive, Sixt and BPCE. We consulted with them two to three times a year to gauge the market. Today, vehicle prices change day by day and we contact rental companies almost every month. Now we put them on a watch to highlight the most interesting traffic laws and models, regardless of brand,” explains this purchasing manager.

Revise the traffic laws

This watch, for example, led Marc Chavallard to question the validity of driving laws that have been established so far. In fact, mileage/term pairs offered by rental companies may be financially attractive, but they do not necessarily fit the company’s needs. Marc Chavallard notes: “We wonder if we set the same driving laws for everyone by redistributing vehicles as needed, or if we set driving laws on a case-by-case basis depending on the needs of employees.”

Taking into account the savings to be made in the operation of the fleet, “we are thinking of saving about 30,000-40,000 euros from 2023 by reviewing the types of vehicles, working on contracts and leases,” this manager suggests.

The questioning of contracts and suppliers is of course accompanied by the evolution of engines to meet the fleet’s inevitable energy transition. Electric and plug-in hybrid models are therefore included in the catalog of cars designed for AC Environnement executive functions. About fifty executives drive these electrified vehicles, almost half of the workforce in this category.

Fleet in energy transition

At the same time, Zoe replaces Clio in the fleet. “So far we have been successful in reducing costs. We have ‘pure’ lease Zoé cars which are more expensive than Clios. But this Zoe is cheaper in TCO because the cost of fuel is reduced, sometimes even free in some sectors like Roanne (42). And with the DKV card, we have access to a very large network of terminals,” says Marc Chavallard. The energy transition will continue in 2023. “Then we will act accordingly and move to clean cars, our goal is to phase out diesel within three years. That’s why we want to drive only clean vehicles, betting on electricity, CNG and bioethanol (E85) until 2026,” expects this manager.

Thus, bioethanol has spread to the AC Environnement fleet, both by adding boxes to some of the vehicles financed under the LOA and by purchasing vehicles designed by manufacturers to run on this fuel. “Initially, we prioritized new vehicle-mounted units funded by the LOA. We have chosen ‘Made in France’ canisters and use fuel produced in France, which has helped reinforce our CSR approach,” adds Marc Chavallard.

Using E85 to green the fleet

This use of E85, in addition to the gradual integration of low-emission vehicles, should contribute to the reduction of fuel costs, which is part of AC Environnement’s fleet savings plan for 2023. “By combining bioethanol, electric and plug-in hybrid engines, we aim to achieve savings of between 100 and 130,000 euros on this item,” the purchasing manager projects. will give