Whether you are an equipment dealer, CPG distributor, construction company, retailer, or logistics firm, the transport of goods to factories, sites, stores, and customers is essential to revenue operations. Fleet management can be expensive and unwieldy due to varying labor rates, multiple replacement parts by different manufacturers, and many repair centers across locations. Adding in a sea of invoices and different purchase types make contract management even more complex.
This organization took a 3-year proactive approach to Contract Management across their fleet maintenance operations with PRGX that resulted in over $25.6M in savings.
$20M+
Corrective Actions Identified
$5.6M
Cash Recoveries Realized
$4B
Auditable Spend
Challenge: Navigating Complex Expenditures with a Contract Management Roadmap
The organization faced significant challenges in maintaining visibility across numerous supplier contracts and repair facilities. With approximately $4B in fleet management spend under audit, PRGX conducted 8-10 contract review activities annually over a 3-year period.
The complexity of managing parts pricing, labor rates, and ancillary charges across multiple locations created substantial risk for billing inaccuracies and missed savings opportunities. With fleet operations representing a critical operational expense, ensuring contract compliance became essential to maintaining profitability and operational efficiency.
Solution: Putting Contract Management in the Driver’s Seat with Continuous Oversight
PRGX implemented a thorough fleet management program that addressed all aspects of the Contract Management Services continuum. Through this comprehensive approach, PRGX identified $20M+ in future cost savings opportunities and recovered $5.6M in immediate cash benefits.
The approach included:
Contract Compliance: Detailed audits identified discrepancies between contracted terms and actual billing, focusing on labor rates, parts pricing, core deposits, independent repair facilities, and ancillary charges.
Contract Optimization: Analysis of the compliance findings revealed opportunities to adjust contract terms for types of purchases not currently included, strengthening future agreements and eliminating systematic billing errors.
Contract Monitoring: Continuous oversight with regular verification of supplier billing details against contract terms prevented errors and ensured ongoing compliance.
The PRGX Contract Management Services team provided a holistic view of fleet management maintenance costs that helped reduce future risks and discrepancies while maintaining strong supplier relationships.
Breakdowns Identified:
- Labor rates billed higher than contract
- Parts price changes not implemented timely
- Core deposits in excess of core refunds
- Independent repair facilities not following contract
- Sales taxes related to recoveries
- Parts purchased outside the contracted price list
- Ancillary charges billed in error
Key Learnings:
- Upload supplier billing details for pricing verification
- Contracts should be adjusted to include types of purchases not currently included
Accelerate ROI Results with PRGX Contract Management Services
Guided by our Contract Insights™ AI platform, the PRGX Contract Management Services team is ready to help you ensure adherence to terms with Contract Compliance, maximize value with Contract Optimization, and proactively manage and mitigate risks with Contract Monitoring.
PRGX applies over five decades of experience across industries to help drive 6x ROI with smarter contracts. Our unique blend of personalized expertise and secure AI technology creates supplier contracts that actively contribute to your bottom line.
Managing a fleet or have another complex logistics contract challenge? Chat with our team of experts about your unique goals, or watch a demo to see our solutions in action.
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