Fleet management goes far beyond vehicle administration, and TCM demonstrates this. In the end, seeking efficiency and prioritizing the well-being of employees is very important in this mission, as well as finding ways to reduce costs. But, after all, what is TCM and what is it 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.
This is because the key found to turn on the fleet management of the future are the key performance indicators. and next to 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), or Total Cost of Mobility, is a concept used in fleet management to calculate all costs involved in company 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 purpose of TCM is to provide a comprehensive and accurate view of expenses, allowing managers to make more informed and strategic decisions to monetize their operation.
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 Instituto PARAR podcast, From Manager to Manager, Golfleet's regional sales manager, Marco Roza, warned of this KPI that started to be heard more frequently in the fleet managers' chat, 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 shows a hypothetical situation that illustrates the importance of understanding mobility as a way to give more time to the life of each employee.
“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 he can perform an even better job. Therefore, one of the premises of the STOP Institute when talking about mobility in the fleet sector is to show that time is life.
But in addition to this relationship with time, mobility can also efficiently reduce the costs of a fleet, 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.
They are taxes, maintenance costs, depreciation and vehicle demobilization, among other expenses that can be spared if they are not extremely important for 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.
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Information and strategic thinking are two important skills for a fleet manager who wants to make a difference in his 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 during your journey, mobility and fleet management go hand in hand.
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What is the difference between TCM and TCO?
While the TCO is mainly centered on the vehicle and on expenses arising from its use such as maintenance, depreciation and fuel, TCM explores other forms of displacement.
In other words, the concept of this performance indicator is broader and more flexible, since it associates other means of transport in 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.
As companies normally face obstacles to centralize and consolidate these expenses, TCM promotes a clearer, more objective view of where your 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 different sources and considering the performance indicator, it is possible to take back this expense control.
Calculating this KPI gives managers greater transparency into their total mobility costs and ensures the following benefits:
A wider scenario
The TCM analyzes car users and includes information such as the chosen vehicle type, car rental, taxis, car sharing or public transport.
We also pack any 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.
For this, it is important know the mobility patterns of drivers and keep a tab on 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.
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a deeper view
As the TCM delivers information about the company's expenses and not just the vehicles, it is 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.
In the same way, corporate travel policies can also be adjusted or the use of alternative means of transport 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 on a daily basis is practically 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 obtaining and integrating detailed fleet information.
Culture change and internal resistance
Another challenge is the resistance and lack of engagement on the part of employees, who often they resist changes and do not understand the importance of TCM for the company.
It is essential to promote an organizational culture focused on the efficient management of the fleet, 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 is necessary to consider that the long-term benefits make this investment valid 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 took the opportunity to share the Golfleet Fleet Management Cost Control Worksheet, a complete and free material to visualize your expenses and create opportunities for new investments:
