Don’t Confuse Value For Money...

Date Posted: 29/05/2018 13:21:47

...With ‘Price’ On Fleet Procurement

Venson Automotive Solutions recommends taking a ‘full balanced score card approach’ to tenders

Price is often at the top of the agenda when it comes to reviewing tender documents for leasing and fleet management, but says Venson Automotive Solutions, quality of service should be a close second, if not on par with price.  Following an examination of the pitfalls of the tender process, Venson is recommending businesses focus on a supplier’s expertise and service offering, to ensure it’s a good fit with an organisation’s business strategy.

“We recommend a ‘full balanced score card approach’, which appropriately weights and measures key criteria to find the right supplier,” explains Danielle Tilley, Business Development Director of Venson Automotive Solutions. “These criteria should include capability, risk, financial stability, corporate social responsibility, value for money and price, to ensure that the organisation with the highest score, not just the lowest price, wins the contract.

“When scoring a tender response, price should account for 25-40% of the scorecard in terms of capability. Anyone who scores more than 50% for price - unless it is a very simple commodity which vehicle leasing is not - is missing a trick and making price too important. The biggest issue for many organisations is confusing value for money with price.”

A little research can go a long way, believes Venson.   Businesses should visit their supplier and meet the members of staff who will be managing their account.  Speaking directly to a potential supplier’s existing customers also gives invaluable insight.  Surprisingly, some procurement processes do not even involve asking a potential supplier to present their solution to the business or visiting their office to see how things are run, both of which should be   key factors in measuring compatibility.

Continues Tilley:  “Whilst the procurement department will most likely take the lead in the tender process, it’s vital that they involve other parts of the business, such as the finance team, HR and the health and safety and environmental manager. And don’t forget the role of drivers, who will use vans and cars as their offices, and are therefore best placed to help explain what is required for the job. By involving all the appropriate skill sets in the tender process, organisations can ensure that they find a supplier that fits their operational objectives, not just their budget.”

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