Our TCO approach
Arval uses the TCO (Total Cost Ownership) approach, i.e. optimising the total cost of holding your vehicles. This is one of the key pillars we leverage to optimize the management of your vehicle fleet.
The TCO approach answers the following question:
“Over a given period, and with the most extensive overview possible, what is the complete cost of operating my vehicle fleet?”
- This includes the direct costs (invoices and identified), the indirect costs (human cost) and the hidden costs (costs incurred due to the lack of optimisation).
- Another standpoint includes the Price (the most visible components), the Cost (by adding the rest of the direct costs) and the Value (which includes everything).
The Price component is usually optimised through a standard procurement process. The Cost and Value components offer the greatest potential for optimisation.
The management of the Arval fleet is organised around three principles:
- Strategic management, including all the decisions related:
- to budget forecasts,
- to the contracts and the “car policy”,
- to the harmonisation of the vehicle fleet strategy with the business’ objectives.
- Tactical management includes all the decisions and actions related:
- to cost and volume control,
- to contract readjustment,
- to the implementation of indicators and specific reporting packages,
- to the opportunities proposed by the market, the leasing company or the manufacturers.
- The operational management includes all the subjects linked to day-to-day operations and that allow for the normal operation of a vehicle fleet.