A fleet can refer to motor vehicles, aircraft, marine vessels, trains, or even groups of people—all coordinating for a common purpose. This paper will touch on the different types of fleets, with a particular emphasis on vehicles. In doing so, this paper will capitalize on the experience of U.S. Cellular® in helping companies make and save money with fleet management solutions, while expanding the topic to provide an engaging context and strategic approach to adopting fleet management technology.
Introduction to the Basics of Fleet Management Technology
Fleet operations are critical to many businesses and require managing costs, maintaining proper service and ensuring adequate productivity. To help achieve these goals, fleet management technology provides monitoring to track a fleet’s location and status, helps reduce fuel costs by optimizing routes based on traffic and service appointments and extends vehicle life with proactive maintenance alerts.
Fleet management technology is based on Machine-to-Machine (M2M) communication from equipment in fleet vehicles to computers and mobile devices enabled by software. Technologies embedded in vehicles include Telematics and Global Positioning Systems (GPS). GPS only provides time and location data. Telematics, on the other hand, is an all-inclusive technology that often uses GPS to perform location- and time-monitoring functions. However, Telematics also combines GPS with other vehicle diagnostics, routing and driver productivity tools. As such, Telematics provides substantially more data than GPS alone, such as detailed vehicle usage and health measures (e.g., usage hours, locations, fuel consumption, engine temperature, engine speed in rpm, and engine warning lights).1
A remarkable amount of computing power underlies the variety of connected solutions that contribute to successful fleet management.
On the front-end, user interfaces on Smartphones and Tablets that present large amounts of data in easily interpretable and interactive formats. For example, detailed live maps, adjustable geo-fences that track visits to specific locations, fuel purchase reports and service reminders.2
Improvements in data transfer and storage capacities bolster the rise in computing power for fleet management technology. As wireless technologies like LTE and cloud computing continue to proliferate, the potential for enhancements to fleet management technology also spreads. These advancements have exciting implications for businesses of all kinds.
Fleet Management for Business
For businesses that manage fleets, vehicles are one of the primary, controllable, operational cost drivers. In order to optimize vehicle spending and make timely and meaningful strategic decisions, businesses must measure fleet usage.4 A key component of comprehensive fleet management is an integrated and connected fleet management technology program.
There are many benefits of connected fleet management systems for business. Those benefits include:
- Vehicle maintenance and safety
- Efficient operations
- Driver management
- Customer service
- Big picture economics
Fleet Management Case Studies
In this section, we take a glimpse into key industries that have benefited from adopting fleet management technology. There are many possible applications of fleet management systems to make and save money, and we highlight a few in these industries to represent the overall potential.
A Texas-based “demand response” transportation company needed an all-in-one device that would track mileage, monitor driver behavior and provide maintenance reports and reminders. They had many vehicles on the road, and customers depended on their services to get to jobs, go shopping, go to the doctor, visit friends and perform many other daily tasks and activities. Therefore, it was essential that all the vehicles were well maintained and driven safely. The company also wanted to prevent drivers from exploiting vehicles for personal use.
To solve their need, the company adopted a vehicle tracking solution. The solution enabled them to ensure safe driving of well-maintained vehicles, driver accountability and operational efficiency. For example, they were able to easily identify the locations of all their fleet vehicles, review idle and stop times, speed up dispatching and improve time and location accuracy of pickups and drop-offs.
Since adopting the new technology, the company has increased efficiency by 50% and saved hundreds of dollars each month.10
The baking industry has benefited from implementing fleet management technologies. The baking industry has experienced pressure to create a greater number of SKUs to fill new demand for healthier options. In addition, the industry has seen pressure from decreased shelf space in grocery stores and the need to make more frequent smaller deliveries of fresh products. Fleet management systems help to coordinate these frequent deliveries so that customers are happy. Bakeries use route optimization to help plan deliveries, improve delivery efficiency and save on fuel costs. At the same time, some systems are capable of sending estimated time of arrival (ETA) updates to customers. The ETA estimates enhance efficiency even further by ensuring that customers are ready to offload deliveries in a timely manner, wasting less time for drivers. Bakeries can also use digital
forms to streamline record keeping.19
The U.S. Department of Veterans Affairs (VA) operates the largest integrated healthcare system in the country, and their available services include home healthcare visits. To aid such a large healthcare system, the VA manages an extensive fleet of vehicles. According to the VA’s 2015 fleet management and budget report, the organization is expanding their use of Telematics solutions to all appropriate vehicles in the fleet. The report cites previous successes with Telematics solutions that have collected vehicle data,
provided valuable feedback to drivers and effectively monitored usage.23
Presumably, these benefits help the VA maintain their fleet, save money, increase safety and improve their support for veterans.
Tractors are the status symbol of the agricultural industry.24 Fleet management technology can be applied to tractors in the same ways it can be used for other types of fleets. For example, on-board diagnostics provide functional data about the health of tractors and other farm equipment. It also allows farmers to better allocate their available equipment to different land work.
Challenges of Using Fleet Management Technology
Although the previous case studies demonstrated the potential benefits of adopting fleet management solutions for business, the benefits do not come without challenges. When a company considers implementing a new fleet management program, they must overcome these issues to maximize the benefits that fleet management has to offer.
- Privacy – A major concern by fleet managers and drivers is that fleet management technology is used to spy on them.
However, this is not necessarily true. Fleet management technologies empower drivers to perform better with
QFSTPOBMJ[FE feedback based on speeding, idling and hard breaking. This allows drivers to change their
behavior on the spot, without the intervention of their employers. Further, on-board systems monitor vehicle
issues to ensure that vehicles are properly maintained and functioning safely.
- Cost – Price is always a concern when implementing new technologies. However, fleet management technologies provide so many potential opportunities for a substantial return on investment that companies should consider the long-term cost of not adopting a fleet management solution.
- Execution issues – Implementing new technology always involves execution challenges that must be addressed. Keep reading for suggestions on how to successfully adopt a fleet management system for your business.
- Installation issues – Some vehicles require the installation of devices in the vehicle so that these devices can capture the engine data. Fleet solution providers can give you training and installation material to install it yourself. Otherwise, professional installers are available to do this job.
Fleet management technology involves highly advanced computing that generates extensive amounts of data, which businesses can use to help make and save money. To help companies make and save money, fleet technologies provides key stakeholders with different opportunities to improve operations, maintain vehicles, enhance safety and driver performance, manage and train staff, serve customers and analyze the big economic picture in their area.
To illustrate those benefits, this paper described a variety of real and hypothetical case studies in the industries of transportation, retail, healthcare, agriculture and field services. Many of the solutions described in these case studies can be applied to other industries, as well. While the case-study applications were all success stories, fleet solutions do not come without several challenges. Therefore, this work touched on some issues that companies might face when implementing fleet management technologies.
However, if organizations plan accordingly, they should be able to overcome these challenges to take full advantage of the opportunities offered by fleet management systems. To help in that process of successful implementation, this paper provided a number of concrete strategies for adopting the right fleet management system for your business. This paper will help you turn these strategies, along with a deeper understanding of fleet management technology, into effective action that will allow you to achieve your goals of making and saving money by optimizing the potential of your fleet.
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