Truck Fleet Life Cycle Management Strategies

This document discusses the importance of life cycle management for TransFast Fleet Company and explores three strategies for managing the life cycle of a truck fleet. It also provides factors to consider when selecting a life cycle management strategy.

Assignment 2: Truck Fleet Scenario
Student’s name
Institution Affiliation(s)

TransFast Fleet Company
When it comes to Life cycle management of fleet, it comprises accounting for the total
operating cost of TransFast Fleet Company. Life cycle management involves the initial price of
the various trucks, the fuel cost, insurance premiums for the trucks, licensing, routine truck
maintenance and purchasing of various automobile spare parts (Corallo et al., 2013). Also, life
cycle management will include any associated costs of administration and loss of productivity
during truck repairs and maintenance.
All fleet companies employ the same priority strategies in managing their variable costs.
Some companies prefer to absorb the downtime cost whereas another organization will deem that
as a direct loss of revenue. Life cycle management helps with the Maths and gives the company
management teams an accurate idea of when to make truck replacements (Taisch, Cammarino, &
Cassina, 2011). Consequently, strict following of a Life cycle management plan will save money
for TransFast in the long run. Life cycle management provides a chance for the company
leadership in managing the variable costs using various styles. Below are three Life cycle
management strategies that are widely used in fleet management (Penciuc et al., 2016).
a) Minimizing downtime and maintenance while maximizing the residue value.
While employing this strategy, TransFast would have to prioritize in the following aspects:
(i) Building a modern and professional business image
(ii) Retention of company employees
(iii) Optimizing all the productivity-related costs to attract more revenue
For many fleet companies and other organizations, time is money. Therefore, any occurrence
of downtime translates in a loss in sales, loss of clients and the company ends up with frustrated
employees’ especially the sales personnel. Considering the high costs associated with downtime,

TransFast should specify trucks that meet its minimum requirements or needs and those that will
offer maximum value to their customers (Mehra, Seidmann, & Mojumder, 2013). TransFast
should consider replacing its trucks when they reach a given threshold like 600000 miles or 5
years - whichever comes first.
b) Ensuring the maximum rate of return on all company expenses.
While employing this strategy, TransFast would have to prioritize in the following aspects:
(i) Improving its professional business image
(ii) Variable cost optimization
(iii) Ensure schedules are flexible and adjustable to accommodate for downtime
Use of this strategy by TransFast will ensure that the company is ensuring balance. As a
result, these would mean that TransFast will acquire full-service value at the minimum
investment in downtime cost when issues arise (Fielding et al., 2014). While considering the
value of all costs, TransFast can afford to replace its various categories of trucks every 5-10
years, or between 60000-100000 miles.
c) Ensuring the capital cost is at its minimum.
While employing this strategy, TransFast would have to prioritize in the following aspects:
(i) The professional image of the business has already been built and therefore not
important at this point.
(ii) Optimization is focused on one particular cost, for instance, maintenance and truck
repairs.
(iii) Avoiding major expenditures for instance by ensuring that downtime is tolerable.
Companies employing this strategy often drive their vehicles to the ground as time is
more abundant than money (Gecevska et al., 2010). Here, repairs are seen as being less costly

and economical than replacing the trucks. In the long run, this strategy might end up being the
most expensive considering the life cycle of a truck as it disregards other crucial costs. This
approach sees trucks replaced well over 10 years and beyond 100000 miles. Below are some of
the factors to consider while selecting either of the three life cycle management fleet strategies.
(i) Strategy 1 and 2 are ideal for companies that are focused on safety.
(ii) The third strategy leaves your fleet vulnerable to ill-timed failures which sometimes
result in accidents and litigations.
(iii) Replacing equipment is almost always safer than repairing it.
(iv) For small companies who do not enjoy the economies of scale while purchasing
trucks, strategy 3 is ideal.
(v) For fleet companies with high variable vehicles, the best approach is to focus on a
few variable costs and not all of them.
Maintenance requirements, difficulty in sourcing and keeping spare parts and urgent
repairs are affecting TransFast. The Marketing department of TransFast has also advised the
CEO that their customers are moving to do business with their competitors. The aim of using the
life cycle management strategies for TransFast is to ensure that its 2 years, 5 years and 10 years
plan of maintaining the business in operation are met (Smirnov et al., 2016).
In the initiation phase of the project, the project manager will focus on defining and
finding a project leadership team with the knowledge, skills, and experience to manage a large
complex project in TransFast. The Engineering department was tasked with the responsibility of
ensuring that they fix the current situation to meet TransFast operations. The Engineering team
will begin by developing procedures for getting the work done, acquiring the appropriate
working models and evaluation of trucks that need repair and maintenance.

In the planning phase, the Engineering team will develop a comprehensive working
schedule that will coordinate the activities of the Engineering team, the finance department, and
the marketing department. The finance department will come up with a detailed budget that will
be used by the engineering team to track the project expenditures against the expected expenses.
The engineering department will develop the conceptual designs that other department may use
as a reference (Amico et al., 2013). The conceptual designs will be used by the procurement
departments to order any materials that the engineering department will need. Also, procurement
will develop labour projections and refine the schedule developed by the engineering
department. Planning is a never-ending task, but for TransFast, it will focus on developing
enough project details that will ensure seamless coordination and communication between the
various departments at TransFast while ensuring that priority decisions are made in time.
In the implementation phase ensures that the project requirements are met. Also,
necessary adjustments are made to the initial requirements in cases of factor change. Any
purchase of materials needed is made, labour hired and trained, and work progress checked
against the set goals and schedules (Smirnov et al., 2016).
The final phase is the closeout phase. The Engineering department presents the work
done to the CEO and the Operations team. The project is closed with a reflection of what went
right and what went wrong presented. Also, the accounting books for the projects are reconciled
and closed, and the final project report prepared. The life cycle management of TransFast fleet
will be beneficial not only to its current situation but also to its future operations.

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