Mercury has developed software applications to enhance and apply data based analytics in the management of fleets. These applications include a fleet replacement planning, financing alternatives analysis, rate and budgeting tool, an optimal vehicle replacement cycle analysis tool; a vehicle allocation methodology tool; an automated Vehicle Equivalent Unit assignment tool; and an activity based cost of service tool.
Capital Asset Replacement Cost Analysis Program™ (CARCAP) is a Microsoft Excel-based fleet replacement planning and cost analysis program that projects near and long-term vehicle (and/or other fixed asset) replacement costs, depreciation costs, residual values, funding requirements under alternative financing approaches (e.g., lease, lease-purchase, reserve fund), replacement charge-back rates, and replacement reserve fund balances. The program is designed to assist organizations in determining the best way to finance the replacement of capital assets such as vehicles and motorized equipment and in managing a systematic asset replacement program on an ongoing basis.
CARCAP employs two types of inputs to produce the above outputs: planning and analysis parameters and fleet inventory data. Because all analyses are parameter driven, the program is particularly well suited to analyzing the effects on an organization’s long-term fleet replacement funding requirements of changes in such variables as fleet size and composition, vehicle utilization levels, replacement cycles, purchase prices, inflation rates, and interest rates.
Vehicle Allocation Methodology (VAM) is a structured approach used by Mercury to assist organizations in performing a study on the size of their fleets with the intention of improving the quality of their fleet management and operating practices while reducing costs. A VAM study provides an organization with an evaluation of each fleet asset to determine its current utilization, and makes future recommendations on whether to retain or eliminate the vehicle. The process considers not only the overall utilization of vehicles, but provides measures, which quantify the need for mission-critical vehicles. Once the initial data is collected and analyzed each vehicle is compared against a threshold set of data, and vehicles that fall below the threshold are recommended for elimination.
Mercury’s eVAM tool incorporates an automated vehicle right-typing and justification protocol that determines a vehicle’s unique ability to provide a specific service to the organization. eVAM analytics allow an organization to objectively right-size the fleet, right-type the fleet, and reduce costs while maintaining or enhancing service levels. An optional fuel-typing feature allows fleet organizations to analyze various outcomes to consider when switching to different types of fuels.
Optimal Replacement Cycle Analysis (ORCA) is a proprietary software tool developed by Mercury to conduct vehicle lifecycle cost analyses (LCA) with user specific data. The tool allows Mercury to tailor the base information to specific needs, use actual or predictive costs, and adjust variable costs in a way that directly reflects the operations at hand.
Mercury has refined the standard LCA model to fine-tune the input data, reflecting the actual operations of each client and returning results based on solid empirical data. It returns results, which determine when the replacement of a vehicle would be the most beneficial to the overall fleet operation, as well as determines any incremental costs of retaining vehicles for periods longer than the ideal replacement year. ORCA also has the ability to determine vehicle lifecycle costs under different fuel type scenarios.
Mercury has developed a tool that automates the assignment of Vehicle Equivalent Units (VEU) to each vehicle in the fleet. VEU Analysis is a fleet management technique used to evaluate vehicle performance metrics. This analytical approach expresses each piece of equipment in terms of its equivalent to a baseline unit of measure. The most common baseline used is a standard fleet sedan, which is given a VEU value of 1.0. All other types of equipment are assigned a VEU value in terms of their relationship to the maintenance level of effort of a standard fleet sedan. By aggregating all of the vehicles in a fleet in terms of their vehicle equivalent units, uniform standards and benchmarks can be applied regardless of the fleet’s size, type, or configuration.
Mercury developed its fleet specific activity-based cost analysis of services (COS) to identify the actual cost and appropriate rate for each service provided by a fleet management organization. Our process includes the following best practice key features and characteristics: 1) identification and recovery of all applicable direct and indirect fleet management service delivery costs; 2) fully documented cost determination, cost allocation, and unit-cost calculations; 3) the use of logical, intuitive analysis steps that are easy to follow, explain, and update on an annual basis; 4) the promotion of fleet user organization awareness of, and a sense of ownership of and accountability for, the costs of the fleet resources and services they consume; 6) promotion of fleet services organization awareness of and accountability for the cost competitiveness with which it furnishes these services; and 7) minimal cross subsidization of costs across fleet user organizations and fleet management service delivery “lines of business.”
