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Acquisition and Lifecycle of Vehicles, Placing vehicle in service,…
Acquisition and Lifecycle of Vehicles
Planning & Budgeting
First stage of vehicle lifecycle
In this stage, asking questions for business case such as Why is it required? , What will it be used for? , what is the proposed cost?
It requires a thorough evaluation of what the organization needs from the vehicle. such as is the new vehicle is replacement of aging vehicle or a expansion of business
It also involes in scheduling of exact acquisition timelines and aoolcation of budget for acquisition
There is other factors that affect the decisions such as corporate culture, funding availability , organizational image
Selection & Acquisition
Second stage of vehicle lifecycle
Defining of Vehicle Specificiation
Research of new technology available in market
Engage the maintenance team and drivers
Understand the requirements / features expected for the future vehicle
Understand technical performance of different models of buses current in operation or trails
Identify the regulation requirements
Selection of Vehicle
Compare and evaulate
technical performance of vehicle
lifecycle cost of the vehicle model
information can be obtained exiting models in operation
the specification of vehicle must be met (e.g. emission standard set by authority
Acquisition of Vehicle
Ensure value for money
Viability
Feasibility
Sustainability
comparing options between purchasing and leasing
Purchasing
fully own the vehicle
upfront costs include a cash price or a down payment, taxes , registration and other fees
monthly payments , if the vehicle is purchased on bank loan, it will be loan payments
Can use it until it spoil
owner enjoys the residual value of the asset
no limit for mileage as its own by the owner but if high mileage, it lower the vehicle trade-in or resale value
Leasing
don't own the vehicle
upfront costs include the first month payment, a refundable security deposite, acqusition fee, down payment,taxes,registration and other fees
it has a specified lease term
Lessee is deprived of the residual value of the asset
some leases limit the number of miles that can be drive per year, but it dpeends the lease type
Types of lease
Open-ended lease
got more control of vehicle utilization and disposal
can terminate the agreement at any point after the minimum fixed term. carry no mileage restrictions
Lessee will be reponsible for remarketing decisions such as resale value.
Closed-ended lease
Leases term is normally set
Monthly payments are based on estimated residual value of the vehicle
Lessor is responsible for any profit or loss on the vehicle sale
ITs more certainty to fleet managers who cares about future of the used-vehicle market
not always based on $
Other factors, Ease of maintenance , Driver comfort , vehicle design
Lifecycle Cost
Fixed
Insurance/registration
License and permits
Purchase, loan or please payment
Depreciation
Taxes
Variable
Labour
Spare Parts
Maintenance
Tolls
Fuel
Evaluation metric
Cost-benefit analysis
estimate short and long term consequences and taking into account both quantitative and qualitative factors
Payback period
ttime required for positive project cash flow to recover negative project cash flow
Internal rate of return (IRR)
discount rate that makes the NPV of a project zero, if IRR is greater than company minimum acceptable rate of return, the investment is good
Return-on-investment(ROI)
The benefit of an investment is divided by the cost of the investment and it show as a percentage or a ratio
Net present value(NPV)
takes into account all revenues , expenses and captial cost associated with the investment
Decomission & Remarketing
Fifth stage of vehicle lifecycle
criteria for decomission vehicle
The current codnition of the vehicle
The mileage operated by vehicle to date
Age of the vehicle
'whole-life' cost of owning the vehicle
Enviroment targets
Methods of disponsal
Retailing
Employee sales
Trade-ins
auctions
Public tender
Transfer to another entity
controlled/specialized disposal
Advantage of decomission & Remarketing
Lower fixed cost
No captial expenditure to made to replace it
Cons of decomission & marketing
Higher maintenance costs
Outdated technlogy = higher fuel consumption
Lower driver morale
Negative to the organizational image
ISSO 55000 : Asset management
Helps to organisation to effectively mange their assets to optimize their lifetime value
Benefits of adopting ISO 55000
Improve financial reporting
Significant cost saving
Improved regulatory compliance
Increased resilience and system reliability
enhanced reputation
Technologies for fleet asset tracking
technlogies for tracking
RFID Tags
Sensors
Wireless modules for devices
Data mangement system
integrated asset management database for montior of vehicles
Example : maximo
Placing vehicle in service
Third stage of vehicle lifecycle
Insurance
Vehicle marked for safety / license plate displayed
certificate of entitlement (COE)
Vehicle modification approval
Operation & Maintenance
Fourth stage of vehicle lifecycle
Fuel management
Fuel consumption and cost
Monitoring fuel pricing trend
Fleet Management
Tracking of vehicle location
Driver log
Vehicle utilization
Road Safety
Driver behavior
Accident rate
Maintenance Management
Fleet failure trend
Adherence to fleet maintenance plan