Managing damage within a fleet and keeping costs low is an essential task of a fleet manager, but can ultimately also be a tricky one. Depending on the fleet size and the safety measures and standards promoted among fleet drivers, the damage ratio can drastically increase if not strategically managed from the get-go. In this blog post, we are looking at one particular example of our client Ursapharm, which dealt with increasing challenges of increasing costs due to fleet damage and show how you can reduce your fleet costs through strategic damage management.
Reduction of damage quota for Ursapharm
Ursapharm is a Germany based pharmaceutical company that specializes in manufacturing pharmaceutical and medical products and is leading the market with their moisturizing eye drops. Ursapharm’s fleet holds up to 100 vehicles as sales managers have to stay mobile to promote products in the field. With an increasing fleet, the damage ratio of the company had also increased enormously over the recent years to 110%. This did not only create difficulties with insurance companies, but also boosted vehicle repair costs to a new high. Based on that, the company was looking to find a solution to get their damage and costs ratios under control and create a sustainable and stable cost structure over the long run.
Making the switch to digital damage files
The first step to creating a baseline for strategic damage management was to review the current situation. As the company was still used to handling their damage and insurance data manually, the first step was moving and connecting all essential data points online through the Avrios platform to ensure transparent and seamless documentation of the status quo.
By doing so, the fleet manager was able to gain a detailed overview of how many damages were currently reported and which insurance data belong to a certain case. The Avrios software underlined the highest cost drivers for the company, for example very high or even unjustified repair costs that could have been avoided to save costs. As a result, the fleet manager was able to act by reviewing all damage management processes as well as internal regulations and identified, that an immediate reduction in damage quota could be achieved by increasing the limit for minor damages without insurance settlement to €1,500.
Building up a network of experts
While making the switch to a digital solution showed immediate improvement, the company also decided to build up a network of experts, including legal counsel that could profound advice in insurance and damage cases and would allow the company to save money on unnecessary costs. Further, the company also invested in specialized workshops for the most cost-effective repairs of frequent claims.
Complete data integration for better management
As a next step, the return process of the Ursapharm was integrated into the Avrios platform and optimized for better management, with a direct effect on decommissioning vehicles and leasing procedures. Based on this new data integration and better overview of vehicle and damage files, the fleet manager was able to access the conditions of all vehicles based on their leasing status and initiated early repairs when necessary. With that, Ursapharm reduced their damage quota from 110 down to 44 percent within 2 years.
Advanced reporting and risk assessment
To stay on top of future damage and repair costs and keep drivers safe, Ursapharm implemented a risk management system. By using Avrios advanced reporting tool, the fleet manager was able to evaluate all measures planned and in process for their sustainable success and enabled him to advance their risk and damage management. These reports also helped the company to benchmark itself against competitive companies.
Creating company sensitivity for damage management
Creating an understanding of the importance of damage management and reducing costs among employees was a final but very important step the company took to manage their costs more effectively, ensure safety of their drivers, and avoid financial consequences. Ursapharm did not only create awareness about damage and claims of the fleet, but also implemented a reward system for drivers to stay on course and reduce damage. Besides that, driver assistance systems such as cameras and parking pilots are now standard to avoid damage and individual driver safety training courses are also offered on a regular basis.
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