fleet vehicles managed with custom fleet management software
Transportation

FLEET MANAGEMENT SOFTWARE: IMPROVING
EFFICIENCY AND CUTTING VARIABLE COSTS

Written by Paul Chimko Posted November 14, 2017
Paul Chimko

Paul Chimko

Believe it or not there are fleet routing traditionalists out there that refuse to abandon their pen and paper method for software that fully automates the process. What they don't know: it's costing them.

Unforeseen circumstance, the Achilles heel of fleet management. A driver reaches a standstill on the turnpike, setting back delivery time an hour, takes a wrong turn and ends up thirty minutes out of the way.

Of course fleet routing software isn't a cure all; it can't change the weather or prevent that commuter from striking a guardrail, but it can provide real-time route analytics via GPS, keeping drivers on the quickest route to their destination, and recalculating to accommodate all unanticipated disturbances.

Third-party mapping applications such as Google Maps, Waze, and Apple Maps, make every driver a navigation expert, familiarizing them with every short-cut and backroad.

Let's face it, even in our hometowns there are roads we have never driven, and dead ends we have never met—fleet routing software eliminates room for human error, preventing stress that pairs with mapping out every turn in area you aren't familiar with.


AUTOMATE THE FLEET, IMPROVE EFFICENCY

Inevitably, a software that provides -

  • Dispatch communication between organizer and fleet
  • Scheduling functions including real-time updates
  • Route replays and KPI's including mileage and arrival times
  • GPS integrations
  • Vehicle monitoring with engine control modules
  • One-click invoices and billing capabilities employee reports
  • Expenditure and transaction history

improves the overall efficiency of a business. An increase in efficiency translates into a variety of benefits for customers, for employees, and for the business as a whole.

THE CUSTOMER: Creating accurate routes manually or using outdated software is an impossible task, customers are relying on the accuracy of a routing system, scheduling their day around an estimated time of arrival based on those routes.

By automating the process with a custom route management software with the capacity to calculate traffic delays and time spent at stop lights, delivery and arrival times can be doled out with a greater degree of accuracy.

Fleet routing software will increase consumer satisfaction by increasing fleet predictability. A greater level of customer satisfaction leads to positive referrals and repeat business, an influx that ultimately ends up in the merchant's pocket.

THE DRIVER: Fleet routing software allows you to monitor your fleet and your crew at moments of the day. We all want to trust that our employees are preforming at their fullest capacity—driving fleet vehicles to the scheduled destination safely and efficiently. Unfortunately, this is not always the case.

In fact, a driver can impact fuel costs significantly. If a driver is operating a fleet vehicle without intent, and with little regard to route optimization, fuel costs will bog down ROI. After all, fuel costs already comprise over half of variable costs, leaving very little room for error.

Employees may unintentionally be your number one expense. Fleet routing software must document real-time analytics on driver travel times, time spent not en route, and individualized mileage.

This allows supervisors to understand employee behavior and predict potentially unsafe driving habits, leading to accident prevention and an overall decrease in expenses.

THE BUSINESS: Fleet routing software is the bridge between fleet and home base—a filtration system for both anticipated and unanticipated road blocks.

It doesn't matter how large a fleet is, fleet management demands constant maintenance leading to high, inescapable, and sometimes unpredictable monthly costs

FIXED COSTS

  • DEPRECIATION - inevitably vehicles will depreciate over time, often immediately after purchase, so maximizing the lifespan of each vehicle with proper upkeep is paramount to minimizing out of pocket costs.
  • FINANCING/LEASING - unless all vehicles are purchased outright, merchants are bound by unavoidable monthly payments.
  • INSURANCE - though the entire fleet must be insured, driver safety and accident prevention can keep these costs at bay.

VARIABLE COSTS

  • FUEL - constantly fluctuating with driver efficiency and price per gallon
  • MAINTENANCE - In the transportation business, there will always be surprises. No one can predict an accident or a flat tire, but monitoring the overall health of each vehicle will prevent engine and brake failure, as well as increasing fuel efficiency.
  • TIRES AND OIL: Have your tires rotated and replaced and your oil changed routinely.

Fixed costs are just that—fixed, they're inevitable, with minimal potential for elimination. When managing a fleet, or any business for that matter, there should be a constant effort to consolidate variable costs. Here is the average variable cost distribution for businesses managing fleets:

variable costs

Fleet management software is completely customizable, and engine control modules should provide real-time analytics regarding the health of a fleet, issuing upkeep reminders and keeping merchants current on their vehicles.

Upgrading to a platform that automates the process may improve efficiency enough to downsize fleet size. Our clients average TCO on a fleet vehicle around $5,000/year.

What if an operator was able to decease their fleet by 50 vehicles after seeing an increase in efficiency?

Eliminating 50 vehicles from their fleet would save their business an estimated $250,000/year. Or maybe the business is expanding due to the improved efficiency, and it's able to widen its customer base, and instead of saving $250,000/year it'll be coming in as profit.


MAKE THE UPGRADE

Perhaps the only drawback to updating fleet routing software is the initial investment, but even then there are affordable software development services to make the process more reasonable.

It's time to reinvent fleet routing with custom software that will improve keep customers happy by improving efficiency in all facets of fleet management.


Disclaimer:

Chetu, Inc. does not affect the opinion of this article. Any mention of specific names for software, companies or individuals does not constitute an endorsement from either party unless otherwise specified. All case studies and blogs are written with the full cooperation, knowledge and participation of the individuals mentioned. This blog should not be construed as legal advice.

Chetu was incorporated in 2000 and is headquartered in Florida. We deliver World-Class Software Development Solutions serving entrepreneurs to Fortune 500 clients. Our services include process and systems design, package implementation, custom development, business intelligence and reporting, systems integration, as well as testing, maintenance and support. Chetu's expertise spans across the entire IT spectrum.

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