NEW FLEET MANAGEMENT "SOLUTIONS"
Truck fleet management
Michelin's proposals to manage the transport of people and goods efficiently and professionally
“Outsourcing” is the word. Turning fixed costs into variable costs, transferring portions of work to outside suppliers rather than completing it internally is its definition. Outsourcing is an effective cost-saving strategy when used properly. It is sometimes more affordable to purchase something from other companies than it is to produce it internally. Why rely on improvisation when you can count on qualified specialists and the latest technology? If the question may seem rather rhetorical, the answer is not. Yet, even in Italy, where in terms of outsourced management of transport fleet, we are still lagging behind other European countries, something seems to be moving in that direction.
«Up to four or five years ago, companies were little interested in outsourcing the management of tires, in favor of internal management, "says Mauro Perin, Commercial Director of Michelin Solutions, with 30 years of experience in the field of commercial vehicles. "The economic crisis and the need to face up to a competition that is no longer predominantly domestic, has led many companies to review their operating costs and methods. Hence the need to focus more on their core business and outsource part of their daily tasks by relying on qualified external specialists so as to have a fundamental added value for their business in exchange of pre-calculated fixed costs». The arrival, among other things, of a new generation of managers in large enterprises (those with at least 100 heavy-duty vehicles) did the rest.
"If nowadays up to 80% of large companies are interested in management outsourcing and 35% has already done so, we could safely assume that by 2020 this figure will surpass the 50% threshold», continues Perin. Can you blame him? Over the past two years we have witnessed a double-digit acceleration of this process and some of the world's largest tire producers introduced their proposals for remote tire management.
Three years of continuous expansion
In Bibendum’s case, for example, a new company was created – Michelin Solutions - dedicated to the development and sale of solutions dedicated to large transport companies engaged in moving goods and people alike, and which, from the second half of 2013 onward, has been successfully operating in Italy with the objective of reaching 10% of the turnover of the entire group. A particularly significant share given the fact that "Solutions" doesn't make money by selling tires, but through services such as tire management, roadside assistance, vehicle productivity growth, advice on how to manage or reduce fuel consumption. The result: "In three years, the number of vehicles we manage has increased by 50%", says Perin.
Michelin truly believes in “Solutions”, to the point that it has turned into a "cross-business unit" available for, not just heavy-duty transport, but also, for example, corporate fleets.
The current proposal
Meanwhile, as we wait for the future to become reality, let us focus on the present. Currently, Michelin Solutions provides practical support to transport undertakings through long-term solutions created to enhance efficiency and increase profit margins as well as technical advice to help clients make the most of their Michelin tires. Additionally, "Solutions" offers a wide range of solutions ranging from the outsourcing of tires to vehicle productivity analysis and fuel efficiency.
Fleet managers have to cope with a number of issues related to mobility each day, and “Michelin Solutions”, as a true partner, offers tailor-made solutions supporting the development of the business and sharing in its results. By relying on Michelin's experience in the fleet management sector, customers can look up to an experienced group, reliable and at the forefront of cutting-edge "know-how" in "cloud computing" technology, telematics, electronics as well as in driver training, but for the most part rely on a local and international presence.
In his contract offer, Michelin points out which resources to use and the final objectives to be achieved, guaranteeing high performance tires and profit objectives to be shared with the company. “Michelin Solutions” is committed to achieving the expected targets with a "satisfied or reimbursed" guarantee. One of the goals, for example, revolves around the reduction of fuel costs through a contractual commitment with transport companies, in which Michelin is ready to use its resources to achieve the stated purpose and share the profits with the partners.
Michelin Solutions is also able to offer support for eco-driving training courses held by experts and developed on the basis of an individual assessment of the driving style. Michelin engineers are always ready to study and analyze data on fuel consumption and to produce reports that will help to improve performances. With Michelin Solutions, road carriers can analyze the different parameters of their vehicles and estimate fuel consumption. Moreover, through tire pressure monitoring systems mounted on Michelin tires, safety for both driver and cargo can be further improved.
In order to provide all these services in a single solution, Michelin proposes four-year contracts and targets measured in liters per 100 kilometers based on initial assessments in terms of type and condition of the vehicles, the type of tires to be used, the weight of the goods to be transported, driver’s behavior and routes. Michelin Solutions does not replace fleet managers, it “simply” provides them with the necessary resources, information and tips to help transport companies improve their performance. As goals are successfully achieved, earnings will soar. If not, Michelin agrees to reimburse the costs incurred. A bit like saying that, for carriers, joining the project is a risk free endeavor.
The 3 "Effi" of Michelin Solutions
Effitires, Effifuel, Effitrailer are the three services Michelin Solution has in its portfolio for transport companies with at least 100 heavy-duty vehicles (trucks and trailers). We're talking about a market that, in Italy, can boast 500 companies and over 140,000 vehicles which account for about 15% of all circulating vehicles.
Effitires is a 360-degree tire management solution, which, through a set of personalized checks of the fleet as a whole and of the conditions of use of each individual vehicle, aims to guarantee a saving on fuel consumption. “Fuel accounts for 30-40% of the operating costs of a transport fleet. Reducing that cost is a real breath of fresh air for companies and could guarantee twofold profit margins for any given vehicle”, says Perin “Michelin Solutions is committed by contract to do so and, if the desired goals are not achieved, we will refund the client in proportion to the costs incurred". If a transport company wishes to take advantage of this additional commitment on the part of Michelin Solutions, it will have to equip at least 70% of its vehicles with a telematic system and Michelin’s high energy-efficient tires. The plus side of this service is represented by a fixed cost per kilometer, all-inclusive management, regular vehicle inspections, a dedicated team of spacialists and 24-hour roadside assistance 7 days a week.
Effifuel is the solution that, after a thorough fuel consumption “check-up”, aims to reduce fuel consumption specifically through the use of low rolling resistance tires (for example the X Line AAA range), integral wheel cover to improve aerodynamics, eco-driving courses for the drivers as well as Michelin’s expert advice on how to implement all necessary actions to achieve the objectives.
Effitrailer caters for the semitrailers of a fleet and plans to reduce operating costs and increase productivity. In this case, Michelin Solutions agrees contractually to reduce repair works, downtime and unladen journeys thus improving efficiency and forecast management flows. Geolocation and tire pressure monitoring systems (TPMS) provide timely information to facilitate prompt action.