Fleet management goes far beyond simply administering vehicles, and TCM (Transfer of Capital) demonstrates this. After all, seeking efficiency and prioritizing employee well-being is crucial in this mission, as is finding ways to reduce costs. But what exactly is TCM and what is it used for?
As the sector needs professionals in tune with trends and willing to carry out increasingly complex analyzes to optimize services, today's content is a must.
That's because the key to igniting the fleet management of the future lies in key performance indicators. And alongside TCO and ROI , TCM can be very important for this new perspective.
🔎 Browse the content:
What is TCM and what is it for?
What is the importance of TCM in fleet management?
What is the difference between TCM and TCO?
What are the benefits of TCM in fleet management?
What are the challenges of implementing TCM?
What is TCM and what is it for?
TCM (Total Cost of Mobility) is a concept used in fleet management to calculate all the costs involved in a company's mobility.
This includes not only the expenses with the acquisition and maintenance of the vehicles, but also the costs related to corporate travel or when employees move from one point to another.
The goal of TCM is to provide a comprehensive and accurate view of expenses, enabling managers to make more informed and strategic decisions to make their operations more profitable.
Having this analysis in hand, it is possible to identify cost reduction opportunities and know the expenses arising from an employee moving from one point to another.
Among the main examples are the use of more efficient vehicles, in terms of fuel consumption, and the implementation of training programs for drivers, aimed at reducing fines and accidents.
What is the importance of TCM in fleet management?
In an interview for the PARAR Institute's podcast, " From Manager to Manager ," Golfleet's regional sales manager, Marco Roza, highlighted this KPI, which has become more frequently heard in conversations among fleet managers, who now understand their role as mobility managers.
“Being a fleet manager is working with indicators to avoid problems”, says Roza, who says now it is also necessary to calculate the TCM (Total Cost of Mobility).
"Companies are going to have to start thinking more about the time that the employee spends to, with mobility alternatives, optimize the work of this professional and consider the expenses of the fleet".
The manager presents a hypothetical situation that illustrates the importance of understanding mobility as a way to give each employee more time in life.
“If you are going on a short trip and you have the possibility of going with an app car, in that time as a passenger, you can answer your emails or think about a presentation for a client”.
Optimizing the time of each fleet professional is essential so that they can perform their job even better. Therefore, one of the premises of the PARAR Institute when talking about mobility in the fleet sector is to show that time is life.
But beyond this relationship with time, mobility can also efficiently reduce fleet costs, so when calculating these expenses it is also necessary to add them to the mobility costs.
A situation that shows very well the importance of understanding mobility resources is when we think about vehicle idleness.
Cars parked in garages and parking lots are a very high cost for a company and the simple TCO calculation already points to this.
These include taxes, maintenance costs, depreciation, and vehicle decommissioning , among other expenses that can be avoided if they are not of utmost importance to the operation.
We often see companies having small fleets for management sectors, for example, where vehicles have low mileage, as they are only used for short distances, such as going to a meeting or visiting a client sporadically.
Therefore, when putting this cost of the vehicle at the tip of the pencil, it is easy to see that having this vehicle is not worth it. And what can solve this problem? Mobility alternatives.
The cost of an app ride or a shared vehicle can be much lower than investing in a vehicle just for that.
🔔 Suggested reading: Carsharing: what it is, how it works, and what are the benefits for fleet management
Information and strategic thinking are two important skills for a fleet manager who wants to make a difference in their company.
Working with key performance indicators such as TCM to make a deep analysis of what your fleet needs is essential to reduce costs and optimize the work of all employees.
Therefore, our recommendation is that throughout your journey, mobility and fleet management go hand in hand.
🔔 Suggested reading: What is the impact of fleet management on urban mobility?
What is the difference between TCM and TCO?
While TCO focuses primarily on the vehicle and the costs associated with its use, such as maintenance, depreciation, and fuel, TCM explores other forms of transportation.
In other words, the concept of this performance indicator is more comprehensive and flexible, since it incorporates other means of transportation into the operation.
If your employees use rented cars, parking, flights or car sharing, for example, it's more interesting to think in terms of mobility.
Thus, taking into account the team as a whole, which is moving on behalf of the company with considerable collision risks, CO2 emissions and time expenditure.
Since companies typically face obstacles in centralizing and consolidating these expenses, TCM promotes a clearer and more objective view of where their finances are going.
What are the benefits of TCM in fleet management?
Many managers still focus their efforts on renewing vehicles or negotiating with rental companies and assemblers in search of discounts. However, the savings opportunities do not stop there.
After all, there are other factors such as fines, claims and idle time that directly impact cash flow.
But by combining information from various sources and considering the performance indicator, it's possible to regain control of spending.
Calculating this KPI gives managers greater transparency into their total mobility costs and ensures the following benefits:
A wider scenario
TCM analyzes car users and includes information such as the type of vehicle chosen, car rental, taxis, car sharing, or public transportation.
In addition, it takes into account peripheral expenses, such as parking fees.
In this sense, it provides much more than just costs, it delivers important data on mobility in your fleet management.
To do this, it's important to understand drivers' mobility patterns and keep track of related expenses.
With the detailed analysis of the Total Cost of Mobility, it is possible to broaden the vision of mobility and car use policies to fill in the gaps and, only then, optimize costs.
🔔 Suggested reading: Fuel economy: 8 tips for reducing fleet expenses
a deeper view
Since the TCM provides information about the company's expenses and not just the vehicles, it's possible to know how your fleet is being used in its entirety.
Therefore, it allows managers to consider more possibilities for optimization and solutions such as car sharing to cover certain services, for example.
Similarly, corporate travel policies can also be adjusted or the use of alternative means of transportation encouraged.
What are the challenges of implementing TCM?
The implementation of TCM in fleet management presents several challenges that need to be overcome to ensure the success of this strategy.
So, we separate two of the main obstacles and their possible solutions.
Accurate data collection and analysis
The benefits of TCM are undeniable, however, the task of collecting, grouping and analyzing data can be extremely laborious.
For large companies with thousands of employees, analyzing all this data daily is virtually impossible.
It's like having to deal with a mountain of expense reports, receipts and questions about enterprise mobility. It's too much of a load for a human to handle.
In this sense, it is necessary to implement efficient systems such as vehicle telemetry , which allows for the acquisition and integration of detailed fleet information.
Culture change and internal resistance
Another challenge is the resistance and lack of engagement from employees, who often resist change and do not understand the importance of TCM for the company.
It is essential to promote an organizational culture focused on efficient fleet management, encouraging the participation and awareness of all those involved.
Therefore, it is important to openly discuss the importance of the performance indicator and its advantages.
A good way to present the performance indicator is to raise awareness of available solutions for urban mobility.
The implementation of TCM also requires investments in training the responsible team, which can represent a financial challenge for some companies.
However, it's important to consider that the long-term benefits make this investment worthwhile and advantageous.
Even if you've come this far, it's because you understand the importance of managing your financial resources to achieve greater operational efficiency.
So, we're taking this opportunity to share Golfleet's fleet management cost control spreadsheet, a complete and free tool to visualize your expenses and identify new investment opportunities:
