By Rob Wilson – Director IPWEA FLEET

Fleet Replacement – Understanding the Risk

What is Risk Based Replacement (RBR)? The short answer is that RBR is a multi-criteria approach that considers, and balances various risks associated with retaining a fleet asset instead of replacing it. As organisational budgets tighten, so too does capital allocated to fleet replacement. It just may not be possible to replace all of the assets you had marked for replacement based on a set kilometre or age target. RBR helps you answer the question: What should I replace? Further RBR provides a structure and consistency that can provide comfort to the organisation’s executive and finance people that the right decisions are being made.

Traditionally replacement timing of fleet assets has been set at a point in time when the notional annualised cost of holding and operating the asset (the average annualised whole-of-life cost) is at its lowest. This economic assessment is a great starting point for long-term forecasting of replacement but does not provide the refinement and granularity required to take into account varying attributes of an asset.

RBR takes a detailed look at individual assets as their notional replacement approaches and helps the fleet practitioner decide if replacement can be deferred or alternatively needs to be undertaken as a priority. Factors included in the assessment are broad ranging and can include attributes such as condition, how the asset is used, the importance of the asset to organisational objectives, financial considerations and obsolescence.

Following on from the 2020 Fleet Management Virtual Workshop where the topic of RBR was addressed, IPWEA FLEET has produced a Risk Based Replacement tool based on a model developed by University of Massachusetts USA. The tool can be used as is or customised to a specific organisational context. Users can enter their fleet details into the tool and then, using predefined attributes and scoring, rate each asset listed. A final score per asset is generated which in turn guides the replacement recommendation.

The IPWEA FLEET Risk Based Replacement tool along with an associated Practice Guide will be launched at an online workshop on 5 May 2021. Participants in the workshop will be provided with the RBR tool, Practice Guide and useful information on fleet replacement planning and customising the RBR tool.

Special Deals for IPWEA FLEET Subscribers?

Are you an IPWEA FLEET Subscriber? If not, you should be! Being a subscriber means you’re part of the IPWEA FLEET program and provides you with a range of great benefits including:

• Significant discounts on IPWEA FLEET products and services
• Access to online tools
• Access to Subscriber Only resources such as the IPWEA Fleet Asset Classification framework, Fleet Maintenance Codes and much more

Subscription covers ALL staff in the subscribing organisation providing real value for money.

In the lead up to the new subscription year commencing 1 July, IPWEA is offering some impressive deals.

• Renew and pay your subscription before 1 June 2021 and receive 10% discount off your renewal fee – renewal notices will be sent out soon.
• For new subscribers; sign up and pay before April 30, 2021 to receive May and June free of charge and have your subscription run through to 30 June 2022.