The World Of Innovative Logistics

What is Fleet Management?



1. Fleet Management in the Modern World


Doing business in a fast-paced environment requires the companies to act fast and change rapidly to be competitive and cope with the change of the industry.


To adapt to this rapid development and expansion, Fleet Management has emerged with the integration of software to help manage and improve the efficiency of operations, especially with any organization that uses vehicles in the form of a fleet.


With the growing daily demands and other challenges such as tightening capacity, change in fuel prices or regulations, Fleet Management plays an essential role in managing and ensuring the fleet's efficiency to keep it running smoothly and profitably.


In this article, Abivin will discuss the Fleet Management system and its benefits in the modern world.


2. What is Fleet Management?


Transportation Fleet in action
Transportation Fleet in action

Fleet management involves a range of activities that lead directly to the efficiency of the vehicle fleet, from the daily task to the long-term plan. The Fleet Manager will oversee the costs, risks, and efficiency of the business involved with transportation services, and the Fleet Management System will be a part of this process in helping the Fleet Manager to perform it more efficiently [1].


Every transportation fleet will have its Fleet Manager in charge of the whole fleet operations, including maintenance, fuel management, driver management, and route planning or any implementation that can help bring efficiency to the fleet. Traditionally, every piece of information is reported to the Fleet Manager physically through reports and paperwork from each department.


However, human errors or unforeseen disruptions are still a massive problem for the Fleet Manager. One of such disruptions is the COVID-19 pandemic. The pandemic has increased the challenges and makes many companies rely more on the Fleet Management System [2]. Statistically, 57% of companies believe that the Fleet Management System will become a standard practice in the future [3].


As a result, the Fleet Management System will help save time for the Fleet Manager to focus more on other essential tasks that can help optimize the fleet's performance. Moreover, with more time saved from doing those tasks, the Fleet Manager can produce innovative solutions for the Fleet Management System and focus more on other essential tasks. The rise of technology and Software-as-a-Service (SaaS) enables the Fleet Manager to be open to any third-party software available on the market.


3. Fleet Management Challenges


When there is a new demand in the business world, there will be solutions to fulfill that demand. In the modern world full of new developments and ideas every day, requests are generated daily as a part of the business expansion.


As a result, these facts lead to the need of enterprises to effectively manage their transportation fleet. In a competitive environment, enterprises will want to gain the advantage in the race for the leading position in the market, meaning that they will have to cope with the rapid growth of the modern world.

Just imagine as a Fleet Manager of a large enterprise, there are many aspects that he or she has to manage regarding a large fleet with thousands of vehicles and drivers across the globe. The expansion of the transportation fleet has led to various noticeable challenges for the manager to keep operating efficiently. Below are the most apparent challenges in the market.


Increasing fleet operating costs


Manual cost management
Manual cost management

In recent years, a big challenge for Fleet Management is the increased operating cost resulting from the rising cost of fuel and the cost of maintenance. This research [4] has shown that the defensive maintenance costs contribute directly to the increase of operating costs. Specifically, the critical components in operating and maintenance costs are fuel consumption, tire, maintenance, battery, and mileage, which will significantly impact the performance of the vehicles and need special attention to avoid paying a high price in the long run. Moreover, many believe that fuel and maintenance costs contribute the most to operating costs [5]. Fleet Manager can identify these costs as “uncontrollable” to put more effort into management and planning to reduce the risks of increased operating costs.


Data integration


Data integration is another challenge for large enterprises that use many separate information systems, which can be an obstacle to the integration process. Technically, any system that is not open for integration from third-party software will create a gap in the information flow, and the incompatibility of these systems will lead to errors or inefficiencies in the integration process. Specifically, this will lead to manual data input from human resources, affecting the system's productivity.


The overload of information


Manual data analyze
Manual data analyze

For any enterprises that operate at a vast scale, their fleets will produce many data, leading to the overload of information for the Fleet Manager to analyze. Just imagine a massive fleet of about 1000 vehicles; each will have information updated onto the system every minute, which generates 60 notifications every hour and 1440 every day, so that will be 1.4 million pieces of data sent to the Fleet Manager for reviewing every day. The size of the data that needs to be analyzed is enormous and noticeable so a Fleet Management System would help and make a difference in the operation of the enterprise.


Information specification


As a Fleet Manager of a large enterprise, the most challenging part is to find specific information from the massive data of a large number of assets and vehicles. When the Fleet Manager is looking for data from different system sources, he/she will take much time to find a specific piece of information in the massive data storage. Hence, this will lead to the time-consumption and frustration for the manager.


Vehicles optimization


The business expansion will always come with more assets and vehicles, which requires more management from the Fleet Manager. Specifically, more investments mean that more data needs to be analyzed, and the manager needs more planning on the company's available resources. Hence, there will be an imbalance in the usage of these assets. The assets may not be used to their fullest potential, leading to a significant loss in the investment with redundant capacity left in their fleet.


4. Why is the Fleet Management System necessary?


Transportation fleet of a logistics company (FedEx)
Transportation fleet of a logistics company (FedEx)

Imagine being the Fleet Manager in a large enterprise with thousands of vehicles and departments. There are many documents to review and decisions to make, which will be a challenge to handle through reporting and utilizing human resources. Using a Fleet Management System will help address all the tracking and routing tasks for the transportation fleet. Through integration and customization, the system can optimize the operation and cut down steps required for vehicle tracking or even use algorithms to forecast the maintenance of the vehicles to make it easy and friendly to the users.


Fleet Management System uses analytics algorithms and GPS to store and manage the transportation team in real-time. A standard Fleet Management System will have main features like real-time management with updated GPS and detailed reports to the system or Route Optimization, which will help to find the best route available for the situations. Moreover, by connecting with a telematics device, this system can help manage and optimize the driver's fuel consumption and ensure safety.


The system's storage of information will help the manager analyze and plan for the long run, from analyzing daily data to conducting a forecasting report for the future. Using Fleet Management System, the above features will help optimize Fleet Management and bring efficiencies to the enterprise.


5. The benefits of Fleet Management System


Real-time management


Real-Time Tracking and Management
Real-Time Tracking and Management

Using the Fleet Management System, the Fleet Manager will manage their fleets in real-time with updated GPS locations. Moreover, the system will provide detailed information about the vehicle locations, task status, ETA (Estimated Arrival Time), delivery time, and any other information related to the shipments. Precisely, vehicle tracking uses a barcode or a smart tag to get the data from the vehicles, keep track of the journey, and ensure the goods' status at each stage [7]. These will help the manager plan and make their jobs more efficient, increasing customer satisfaction and saving time for other essential tasks.


Data Analysis


For a Fleet Manager overseeing a vast fleet with thousands of vehicles, he or she will have many data from different sources to gather and analyze, which is very time-consuming. With the Fleet Management System's help, the manager will draw a big picture of the fleet from drivers to vehicles with all the necessary elements (fuel costs, maintenance, and compliance) on a dashboard [3]. Thanks to the development of IoT technologies, the Fleet Management System provides an accessible interface that is easy to use with various reports automatically generated daily. From that, the manager can make informed decisions that are effective to the fleet's operation.


Cost Reduction


Fleet Management Systems can help reduce operating costs by saving costs in different areas. The system can analyze the vehicle diagnostic report and set reminders for maintenance through the predictive feature, saving costs for repair and preventing serious, expensive problems that may occur [3].


Fuel cost is another area that can be optimized by using the Fleet Management System. Precisely, the system will track the drivers' behaviors to analyze and remind them of proper behaviors to save fuel and perform more efficiently. According to this research [6], repair and maintenance can contribute directly to the vehicle fleet's competitiveness since the appropriately changing of oil can increase the vehicle's lifespan. Moreover, the research has pointed out that the oil change is related to gas mileage, which will help reduce fuel costs in general.


Route Optimization


Route Optimization on Abivin vRoute
Route Optimization on Abivin vRoute

Route Optimization is a feature that can help create an efficient route plan to improve the performance of the transportation fleet. Precisely, each vehicle will be filled up to its capacity and provided with Estimated Time Arrival (ETA) for each delivery point.


This feature will help ensure that the drivers are allocated efficiently without doubling back on themselves, and each driver is allocated with arrival windows to use every vehicle to its full potential [3]. Also, the system allows dispatchers and drivers to adjust the plan manually so that the system can be flexible in dealing with any unexpected cases like call-in sick, stuck in the traffic, or new update orders. From the route optimization function, reports and landmarks can be recorded throughout the deliveries, giving the managers a detailed analysis to improve the fleet's performance.


Driver Safety & Training


Driver’s Safety in operation
Driver’s Safety in operation

Safe operation for the drivers can reduce accidents, decrease the insurance cost, and reduce the operation cost [8]. These come from the fact that the Fleet Management System keeps track and gets data from every driver on their trips report directly to the dispatcher or manager [3]. The manager can then have a suitable solution like a reward for safety practice or deciding whether more training is necessary from these data.


Another aspect of the Fleet Management System that makes it worth investing is the alerts feature applied to every event that happened during the trip. Specifically, any sudden activities related to speed, hard turn, hard braking, or acceleration can be reported immediately to the dispatcher to keep the drivers safe. The system can connect with telematics used on vehicles to keep track of its motion, especially with metrics like hard-braking, speeding, or seat belts to remind the driver of any dangerous circumstances that may happen to prevent the incidents on the road [9]. This report [3] has shown that the Fleet Management System can reduce the cost of accidents by over 21%.


Conclusion


Fleet Management has become a vital part of any enterprise to help ensure efficiency in managing transportation fleets of any size. With the rapid development of the industry, foreseeable challenges related to the information and increase in cost come from ineffective management. Hence, the Fleet Management System has become a popular choice for any Fleet Manager in dealing with their enterprise's challenges. Thanks to it, the Fleet Manager can save time for other essential tasks, from tracking vehicles to handling numerous data like fuel consumption or maintenance schedule, and keeps the equipment running longer. Also, driver's safety and behaviors can be controlled through this system, contributing directly to supporting the low cost. Through time, the Fleet Management System has proven its effectiveness and is widely used by many companies from different industries to manage their operations better.


References


[1] Development of Fleet Management Systems for Autonomous Vehicles

[2] Coronavirus challenges drive fleet management system investment, say Jaama

[3] 5 Challenges Fleet Management Systems Are Solving

[4] (PDF) An Overview of Fleet Maintenance and Operating Cost: Key Components and Methods

[5] Fleets Concerned About Rising Operating Costs - Operations.

[6] EXAMINING THE EFFECT OF FLEET MANAGEMENT ON COMPETITIVE ADVANTAGE IN THE TRANSPORT INDUSTRY Jerry Edem Aflabo Drivers and Vehicle

[7] (PDF) Improving logistics services through the technology used in fleet management

[8] The Importance of Fleet Management System for Business

[9] How to Increase Fleet Productivity Using Telematics


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