Abstract
Commercial tyre maintenance outsourcing is a creative and innovative service offering
to the road freight industry in South Africa. It allows fleet operators to focus on their
core business aspects, leaving the management and control of the tyres in their fleet to
professional service providers with the necessary technical expertise and experience in
this field. Currently tyre maintenance outsourcing service providers are under increasing
pressure mainly due to price wars in the marketplace between the major tyre
manufacturers fighting to maintain or increase their market share. The road freight
industry in South Africa is also unique in that there is a hand full of major players,
dominating more than fifty percent of the market, thereby leaving tyre suppliers and
service providers doing everything in their power to retain the business they do have,
and aiming to increase their share of the market at any cost.
The main objective and purpose of this study has therefore been to conduct an
investigation into commercial tyre maintenance outsourcing practises in South Africa.
The following aspects were covered in this study:
! Defining the concept of outsourcing and more specifically tyre maintenance
outsourcing.
! An overview of the tyre maintenance services currently available in the South
African market and possible alternatives that may appear in the future.
! The current state of the commercial tyre industry in South Africa, focusing on the
main role players and the services and products they offer to the market.
! The current state of the road freight industry in South Africa, focusing on the
market shares the main role players hold, and other relevant transport statistics.
! The factors that play a role in the calculation of cost per kilometre rates, as well as
the aspects which contribute to the success of a tyre maintenance outsourcing
contract.
! An evaluation of the implications of technological advances on tyre maintenance
outsourcing.
Synopsis - ii
Based on the above, a number of recommendations were made firstly (i) for companies
that are current or potential users of tyre maintenance outsourcing, and secondly (ii) for
companies that are current or potential providers of tyre maintenance outsourcing.
(i) Recommendations for tyre maintenance outsourcing users
1. Companies need to identify their core and non-core activities.
2. Potential outsourcing users need to identify the most appropriate service provider
not on pricing alone, but should also consider the overall long term business
relationship, as well as the total service package on offer.
3. Companies need to realise that outsourcing is not a short-term solution to control
costs, but a long-term project where the true benefits will take time to materialize.
4. Companies need to ensure that a clear tyre policy is agreed upon with the service
provider at the inception of the contract.
5. Companies need to ensure that a service level agreement with measurable key
performance indicators (KPI’s) is agreed upon with the service provider at the
inception of the contract.
6. Companies need to understand the full cost of all the different items associated
with the contract they are entering into.
(ii) Recommendations for tyre maintenance outsourcing service providers
1. Companies need to build excellent relationships with their clients as to increase
communication and flow of information.
2. Companies need to analyse the service they currently provide and determine which
factors must be improved upon as to increase their service levels and
competitiveness in the marketplace.
3. Companies need to carefully verify all the information they receive from fleet
operators upon quoting for a new contract.
4. Companies need to understand the needs of the market they operate in, as to
adapt their service offerings around these needs.
Prof. J.H. du Plessis