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Fleet management systems have been around a while and have become so complex that it has evolved into Field Resource Management. This article explores 5 reasons why all fleets need at least a basic Field Resource Management system.
Fleet Cost-Reduction Strategies: Direct Expenses
Use the right vehicle with the right equipment for the job. Feature and model creep are common causes of excess fleet vehicle depreciation. Drivers love four-wheel drive, extended cabs, plush leather seats, V-8 engines, and all kinds of other features. While providing fleet vehicles with those options may be good for morale and can be a good business decision, it will add to the depreciation cost. Trading in older vehicles for more fuel efficient fleet vehicles is also a good decision and this will be discussed further. Also, choosing fleet vehicles without regard to expected resale value can result in higher depreciation. For example, if you convert fleet vehicles from SUVs to sedans and remove some unnecessary amenities you can save up to hundreds of thousands of dollars in fleet expenses.
Negotiate well with vehicle manufacturers. After selecting the right vehicle, acquire it for the best possible price. Vehicle manufacturers compete aggressively for market share and have significantly increased purchase incentives for fleet customers who buy new vehicles. By sourcing with only one manufacturer, your fleet can improve net discounts by approximately 5%, reducing depreciation by up to $225,000 per year.
Does your company have mobile employees such as sales reps or field service technicians who routinely need vehicle transportation to do their work? If so, managing your mobile employees and fleet vehicles effectively is an important part of maximizing revenue generation and customer satisfaction. Most executives understand the importance of keeping these employees productive, but they are often not aware of the significant productivity and cost-savings benefits that come from efficiently supporting employees’ transportation needs.
The Challenges of Managing Fleet Costs
Vehicle-centric companies, such as trucking and distribution companies, are experts in fleet management and usually have the in-house resources to do it quite well. However, for the rest of us in other industries, executives are primarily focused on managing the core of the business – whether it’s building high rises, manufacturing computers, or servicing HVAC equipment. Fleet managers simply don’t have the expertise or the inclination to invest much time or energy in improving fleet operations. Unless you are an expert in fleet management, vehicle expenses by their very nature are decentralized–usually occurring in small transactions spread across numerous locations and employees. On the surface, fleet management costs seem very difficult or control.
Contrarily, taking the time to focus on fleet management issues via basic operational policies and a little centralized control can significantly enhance worker productivity and result in major cost savings. Optimizing fleet management can ensure that mobile workers get the transportation their job requires while simultaneously yielding up to $1 million in cost savings for a typical mid- to large-size enterprise. Whether your company’s fleet is large or small, the same concepts apply.
GPS vehicle tracking systems are a worthwhile investment for many fleets. Here’s a few reasons why fleets like using fleet GPS tracking systems:
1. Fleet tracking systems reduce business operating costs and increase fleet safety by targeting poor drivers that speed excessively, resulting in wasted fuel, excessive engine wear, drive up insurance rates and cause accidents.
2. Many fleet managers like using the system’s automatic mileage reminder to reduce downtime and enhances vehicle resale values by encouraging scheduled, preventative maintenance. Vehicle tracking systems can remind you when it’s time to rotate tires, change oil or perform other scheduled maintenance. Conversely, fleet management systems also can tell you if a vehicle is not in need of scheduled service which helps keep maintenance costs under control.
GPS vehicle tracking devices are a popular tool for thousands of business owners. Fleets with only one vehicle all the way to original equipment manufacturers like Ford, GM or John Deere are including GPS tracking devices in their vehicles. GPS tracking software is most frequently used by businesses in the service, transportation and manufacturing industries. Companies with fleets of one to to fleets of 10,000, such as FedEx, rely upon their tracking systems to improve their profitability.
Vehicle tracking systems should be considered if your company has more than two vehicles. If your company has more than two vehicles, then you have a fleet. The goal of fleet management is to extract maximum value and minimize the cost of maintaining of vehicles. Fleet management is a complex and comprehensive challenge. It involves much more than just knowing where drivers and vehicles are located or routinely checking oil levels in your fleet vehicles. Fleet management includes vehicle procurement, vehicle maintenance, vehicle disposal, vehicle tracking and the management of logistical, operational, functional, regulatory and compliance requirements.
With the assistance of modern technology such as fleet GPS devices or vehicle tracking systems, fleet management has now become much easier and cost effective. Fleet management is an important and often overlooked part of many private organizations. Due to the economy, private fleet operators today are under more pressure than ever to control expenses. Optimizing your fleet’s operations can improve your company’s productivity, reduce costs and have a positive impact on the bottom line.
GPS fleet tracking systems are successfully being utilized in the largest cities in America for good reasons. According to Helen Rane Carbone, Chief Programmer and Analyst for the Chicago’s Department of Transportation “Before we implemented GPS, our fleet managers and dispatchers had virtually no real-time information on the whereabouts or activity of our fleet vehicles. We relied on very basic communication using two-way radios and hand-written reports. This was never able to provide the type and depth of information we needed for real performance monitoring, improvement, and accountability, which is expected of all city departments.”
According to Carbone, “before implementing a vehicle tracking system, simply keeping track of mobile resources from a dispatcher’s perspective – vehicle and driver scheduling, routing, call response, location in the case of emergencies – was a very difficult daily task. Truly measuring fleet and mobile employees’ productivity was practically impossible.”
Cities like Chicago are also using GPS fleet management systems to enhance their efforts to go green. Fleet managers are using real-time vehicle location data to optimize routes and reduce excessive idling in an effort to reduce gas consumption, CO2 pollution and other hazardous greenhouse gas emissions. According to Ms. Carbone, telematics plays a big part in many of Chicago’s environmental initiatives in becoming a true green fleet. “Fleet GPS management systems help with everything from the number and type of vehicles we’re using for a particular task, how they’re being used, and the amount of CO2 emissions they’re producing. Everyone is looking to big cities like Chicago to lead the way in this, and remote fleet management has gone from being a valuable tool to an absolute necessity.”
One of the best things about real time fleet tracking is that it enables fleet managers to work hand in hand with their drivers and other mobile employees, even when they are thousands of miles apart. Every day there so many unforeseen circumstances arise, resulting in the need for last minute changes. So having a real time two-way communications system between fleet manager and commercial vehicle drivers is critical to a running an efficient fleet. Taking into account things like traffic jams, accidents, unpredictable weather conditions, delivery instructions, last minute pick-ups, and employee issues is an important part for a successful person managing fleet vehicles and drivers. Commercial vehicle tracking facilitates instant and accurate responses to ensure that the best solution can be deployed with the least amount of time or costs.
An average day someone overseeing a mobile workforce can involve matching busy schedules with the nearest available resources or service personnel to a new or changed location. Without a fleet management system, a telephone can be used to stay abreast of the constant changes, and to communicate with mobile employees. But a vehicle tracking device is by far superior to using a telephone to communicate – even if you have a smartphone with SMS text messaging, email and GPS navigation. The bottom line is a telephone no matter how smart it is, just doesn’t compare to a vehicle tracking solution.
Garmin’s (NYSE:GRMN) fleet management interface provides the best way for fleet managers to improve response times, optimize fleet resources, and ultimately achieve lower costs and higher profits for their companies. Garmin’s fleet management interface makes it easy for dispatchers to send multiple destinations and on-the-go instructions directly to drivers. Fleet drivers are able to use […]
Fleet management and trucking company owners should consider investing in eco-friendly driver training for their fleet truck drivers. Running a green fleet will decrease your fuel costs, vehicle emissions, reduce fleet vehicle wear and tear, and improve your company’s image. Eco-safe truck driver education courses teach drivers how to eliminate identify and eliminate poor driving habits that waste gas and produce harmful CO2 emissions.
Typically drivers who complete eco-friendly training usually see an improvement in MPG of between 10% and 25%. In addition , green driver training courses can dramatically improve fleet safety with the effect of reducing fleet accident rates and the associated costs. Intelligent route planning and speed control techniques learned in the course can generate substantial fuel economy savings for your entire fleet.
