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Do You Have A Total Cost Reduction Plan?

As summer approaches, it’s the perfect time to begin developing a total cost reduction plan. Today, more and more transportation departments are focusing on Total Cost of Ownership, which includes initial purchase, fuel costs, maintenance, repairs and replacement parts. To learn more about TCO, watch this short animation.

The first step in creating a total cost reduction plan is to establish your benchmark expenses for each bus individually. Answer these questions:

  • What are you paying in financing fees?
  • What is the per-mile cost of fuel for each bus?
  • How many miles does each bus travel per week?
  • How much are spending on routine maintenance?
  • How much downtime does each bus experience, and what does that cost you?
  • What is the average cost of replacement parts of each bus?

Simply collecting this data and comparing it among all of the buses in your fleet can give you a better understanding of how much each bus is costing you over time. Basically, how much do you pay for a bus after you pay for a bus?

Next, you can focus on the problem areas for each bus, and create strategies and tactics to reduce costs. For example, can you reduce the length of routes for less efficient buses? Can you train drivers to cut down on excessive idling or driving speed? Perhaps you can put older buses on a more regular maintenance schedule to catch potential failures before they become costly. And we strongly encourage you to consider using more advanced replacement parts that can enhance efficiency and reliability, even if they cost more.

Of course, at some point you may realize that a new bus may cost you a lot less annually than an older bus. Let your Thomas Built local dealer run the numbers for you. Today’s financing options are very customer-friendly.

In addition, look into alternative fuel options, especially when considering new vehicles. Is there an existing local infrastructure? If not, your Thomas dealer can help you determine how much it will cost to create your own. With our help, more and more school systems are switching to alternative fuels.

Developing your own total cost reduction plan not only can help you correct existing problems with your fleet, it will help you make better operational decisions in the future. Again, please talk to your Thomas dealer about all of the many ways you can reduce your Total Cost of Ownership.

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