Good fleet management has the potential to increase operational efficiency and bring significant cost savings for businesses. Fleet managers making better use of their vehicles, employees and operations can improve fleet efficiency and ensure their business makes the most of improved efficiencies.
The key to effective fleet management is recognising what “effective” really means. To some businesses fleet management is a function absorbed into other roles and given an ad hoc status and scant appreciation. Inevitably this leads to a skewed approach that negatively impacts on fleet efficiency.
There are many costs directly linked to fleet management and these are all fundamental to any successful organisation. For this reason, the first step any company should make with regards to its fleet management is to ensure that it is established as a fully established functional department within the business.
Clients, on average, can see an 18% reduction in their fleet costs from an effective fleet management system, according to the managing director of fleet management provider Total Motion. Once the function is established, ensuring fleet management is effective and generates cost reductions, is down to managing the variables within a cohesive fleet management system. Those variables are people, vehicles and operations.
Let’s take a look at each variable to see how dedicated management can help to reduce costs.
Fleet cost savings from managing people
When managing a fleet you need to have complete visibility of where your drivers are located and what they are doing. A business investing in software to monitor driver behaviour can gather driver and vehicle data which help to form opinions and future policies. This can lead to training opportunities on efficient driving techniques to save fuel costs and where and when to refuel.
GPS software can also help the driver with quickest routes and how to avoid traffic congestion and accidents, all leading to better fuel management, less downtime and more efficient operations.
From a compliance point-of-view, risk assessments, health and safety training, insurance and licence checks can all result in operational cost savings and also a reduction in fines, delays and administrative costs.
Fleet cost savings from managing vehicles
Fundamentally you need to assess whether you have the right vehicles for your operations. Do you have too many? Are they the right type of vehicle for the jobs they are doing? Are they designed for long haul journeys or short journeys? Have they been correctly adapted for your purposes? Have you considered age and depreciation? Are they roadworthy and safe? Are tax, insurance and vehicle MOTs up-to-date?
Tracking data can highlight whether vehicles are cost effective to run and whether you can achieve better miles-per-gallon (MPG) from other vehicles, or by converting your fleet to electric vehicles. You can also look at funding models for your vehicles.
Perhaps it is cheaper to lease your vehicles as always driving newer vehicles with better fuel efficiency, better on-board tech, better reliability and less fleet maintenance costs can be far more cost-effective. It may also be easier financially for the business, you can better manage monthly costs through leasing and the business won’t have a depreciating asset on its books and therefore no concerns about a re-sale value.
Fleet cost savings from managing operations effectively
First and foremost you need to look at whether you can cut out unnecessary travel from your day-to-day activities. While drivers can be advised on ways to reduce fuel consumption through fuel efficient driving, one of the key factors with a company’s vehicle fleet is ensuring jobs are managed effectively. This means organising multiple drops or visits on one journey, without having to return to base. Can your fleet vehicles do collections on the same journey as deliveries? Driving back with an empty vehicle is a business cost, so is there a way this can be avoided?
A better use of technology can mean meetings are carried out using inter-connectivity. This immediately reduces travelling time considerably and results not just in reduced fuel usage, but also a reduction in vehicle wear and tear and a better utilisation of employees, i.e. they can be doing something more productive than spending unnecessary hours on the road. In all cases, data on the miles travelled can be collected and analysed to support these decisions and enhance fleet productivity.
A fully-functioning fleet management system requires hierarchical support and needs to be acknowledged as a key function within a business. Once it is given this status, critical costs can be properly managed, with decisions backed by accurate data, and savings through reduced costs throughout the entire fleet are there to be made.
