The benefits of a vehicle management system
Competition is at its prime in nearly all industries and all trades. Businesses, worldwide, are striving to achieve high performance and efficiency, yielding results that will keep them viable and at a nominally competitive growth rate. For instance, transportation of people, goods and services are typically complemented with one or more types of fleets of vehicles. If managed incorrectly, vehicles and equipment — and drivers, for that matter — may become liabilities. In short, that’s where a vehicle management system comes in.
Technologies such as Telematics are available to mitigate the risk of that outcome becoming a reality. Fleet management systems are now readily available, using such technologies, to help businesses strategize their operations and coordinate the use of assets and workforce, toward optimal performance and efficiency. Thus, improving their viability and growth.
What is a vehicle management system?
A vehicle management system is a software system — or platform — that serves to manage commercial fleets of vehicles, such as cars, vans or trucks — or even heavy equipment — to ensure they’re utilized safely, efficiently and professionally, while making sure they’re well maintained and high-performing.
How is it used?
Depending on the type of vehicle management system, it may include functionality to:
- Improve fleet safety and working conditions
- Improve the behavior and performance of drivers and beat unsafe driving
- Schedule shifts and work hours
- Leverage driver retention
- Track vehicles, assets or professional equipment (even trailers and containers)
- Schedule routine maintenance
- Manage fuel efficiency
- Keep track of malfunctions
- Track mileage and manage deductible expenses
- Produce individualized reports for all parties involved
Who is it for?
A vehicle management system can prove useful to nearly any business that uses a fleet. This includes, but is not limited to:
- Delivery fleets (last mile delivery)
- Supply chain / perishable goods fleets (cargo)
- Taxis, Limos and VIP vehicles
- Facility trucks
- All light duty vehicles
- Heavy duty vehicles and mining equipment
- Shipping containers / maritime transport
- Backhauling fleets
- Moving trucks
- Grey or white fleets
- Rental/Leased vehicles
- School buses
- Private vehicles
11 Key benefits to a vehicle management system
Depending on the type of fleet being managed, a vehicle management system can reap a few or more business benefits. Notwithstanding that it largely depends on the quality of management conducted by the fleet owner, fleet manager or fleet operator, even mere few of these benefits can make a real difference in the fleet’s performance efficiency, with substantial impact on ROI. That is to say, it may make the difference between a fleet of assets and a fleet of liabilities.
The most prominent benefits of a vehicle management system include, but are not limited to the following:
1. The entire fleet on a single screen, in real time
Even though a vehicle management system is typically different from a GPS tracking system, it provides vehicle tracking capabilities. That is to say, the inability of a fleet operator to know the location and status of their fleet and drivers can give way to a variety of different problems. Granted that, poor productivity, fleet inefficiency and delayed deliveries and shipments are only a few of them. Surely, these issues, given the right circumstances, can seriously hurt business reputation and customer retention.
A vehicle management system offers full fleet visibility on a single screen. Fleet managers get all sorts of information, such as:
- Location and status of vehicles and drivers
- Trip logs and events, routes followed, delays caused
- Productivity, efficiency and performance levels of vehicles and staff
- Timely notifications regarding malfunctions and delays
In general, fleet managers and operators enjoy better insights that lead to better customer service.
2. Vehicle status, readily available
Even the slightest problem in a vehicle’s engine may eventually lead to severe damage and breakdowns. To a fleet manager, there is nothing like being notified about any issue, any indication of malfunction and any sign that a driver forgot to check oil and fuel levels, lights and indicators and tire pressure before they left the lot. Even more so when there is a malfunction that just happened, brewing into some serious breakdown. In brief, all this information will be readily available to the fleet manager, per vehicle. A historical report of all incidents throughout a season will indicate whether a vehicle is due to be replaced, improving overall fleet performance.
3. Driver and vehicle safety and reliability
Statistically speaking, a motor vehicle crash happens approximately every 5 seconds. Peak hours in a busy rural area won’t make things easier. Fleet managers need to know how to educate drivers on safe driving practices. And having a driving behavior report, or a driver scorecard helps identify the behaviors that need to be addressed. In many countries, it is the law that all vehicles are also equipped with an on-board camera that will record all types of incidents for future reference.
Vehicle safety and reliability
Additionally, a fleet of well-maintained vehicles has proven to play a very important role in safe driving, improving overall fleet safety and reliability. And, it’s only logical that poorly maintained vehicles can endanger drivers, passengers and bystanders on the road. Rightly so, alerts and notifications on any possible malfunction, non-compliance with regulations or reminders to stay ahead of normal wear and tear are uniquely useful to a fleet manager; at least, one that aims to keep the fleet well maintained and the staff well informed and professional.
4. Improved fuel efficiency, minimized fuel fraud
Economies change and the prices of repairs, routine maintenance or even fuel, can change in an instant. In truth, fuel price is not the only factor to affect fuel efficiency. To explain, fuel consumption is the most usual culprit in cases of inefficiency. And, since fuel expenses are nearly 20% of the operating costs for a fleet, managing fuel consumption will serve its purpose.
Reducing speeding and aggressive driving behaviors will definitely reduce fuel consumption. Additionally, eliminating idling and taking more efficient routes will also help. But, properly maintaining fleet vehicles will make the most difference in the long run. Keeping air, fuel and oil filters clean, keeping the tires in good condition and nominally inflated and the braking system well maintained will make all the difference in fuel efficiency — not to mention safety.
To that end, a vehicle management system provides trip information such as fast acceleration, hard turning, harsh braking, speeding and idling. Therefore, this type of information helps identify what needs to be addressed and how, on two different levels; driving behavior and vehicle maintenance.
No more fuel fraud
At some point, a fleet manager will be faced with a situation where, sometimes, drivers will be charging fuel and using it for their own benefit; fuel fraud. Sadly, it’s a quite common practice across industries. Especially since automated fuel dispensers have become available. It becomes worse when drivers use fuel cards.
Functionality like mileage reports and fuel consumption management help deduce the amount of fuel that should be used, as opposed to what was purchased. That alone, should be enough to help reduce or minimize the amount of fuel fraud happening in the fleet.
5. Improved lifespan for vehicles and equipment
Increased fuel consumption and bad mileage are dead giveaways for a low-performing vehicle; frequent malfunctions is another. Specifically, what all these things have in common is that they clearly indicate a poorly maintained vehicle. In a fleet, where a vehicle should be an asset, this is a cause for all sorts of trouble. And it can, in fact, range from damages and losses, to unsatisfied customers.
Mileage tracking in a trip log, fuel consumption tracking, diagnostic trouble code (DTC) alerts and notifications about bad driving behavior are bits of functionality that can help a fleet operator identify what needs to be dealt with and opt for repairs that are, in fact, required. Such functionality eliminates guesswork and allows fleet managers and operators to optimize their maintenance budget. Especially if they cannot afford an in-house repair shop.
6. Better reporting on driver behavior, work hours and vehicle performance
There are so many aspects of business a fleet manager needs to keep tabs on. To that end, a vehicle management system can help tidy up their standard operating procedures by offering them meaningful, normalized insights. Additionally, automated, personalized reports can be made available to different people in the company, summarizing the information they actually need to improve their workflows and help grow the business.
A vehicle management system can offer a range of automated reports including, but not limited to:
- Vehicle status reports (per vehicle)
- Trip log / Mileage reports / Historical data (per vehicle or piece of equipment)
- Driver scorecards (per driver)
- Shifts & Work hours reports (per shift or per driver)
- Safe driving reports (per driver)
- Driving behavior recommendations report (per driver or per vehicle)
- Fuel consumption reports (per vehicle)
- Diagnostic trouble codes reports (per vehicle)
- Routine inspections / maintenance timeliness reports
- Maintenance log reports (per vehicle)
- Route deviation reports (per driver or per vehicle)
- Asset performance reports (ROI — per vehicle or piece of equipment)
Employee accountability and improved driving behavior
With a small, medium or larger fleet on the road, it becomes more and more difficult to track any and all issues that arise from human error. To enumerate, fatigue, dissatisfaction, ignorance or plain, downright indifference or self-interest can cause people to forget their professionalism. And, in truth, they usually fail to err on the side of caution. This can also happen to fleet drivers, of course. But, there is a way for a fleet manager to hold them accountable for their actions.
From bad driving behavior, such as speeding and getting tickets for it, to fuel fraud, increasing operational costs, and delayed deliveries costing the business its customers, fleet managers can use a vehicle management system to produce helpful information that will help them reduce or eliminate such phenomena. Features such as vehicle tracking, real-time fleet monitoring and automated reports for driving behaviors and fuel efficiency can change the game of vehicle management entirely; setting new rules that make the business viable and set it on the path for growth. That is, streamlining fleet operations in the process.
No more questionable timesheets
Of course, the most subtle and nearly undetectable type of fraud is timesheet fraud. A driver can leave the lot on time, but fail to show up at his destination in time. Perhaps a 25 minute stop at their favorite coffee shop doesn’t seem like it’s worth the fuss. Or, perhaps a 45 minute respite seems reasonable after two hours in traffic. But, if more than one hour is lost daily, that’s actually almost a full workday, per week. And it’s a type of cost that can, in time, become unbearable. It can cause problems, such as:
- Increased labor costs
- Increased fuel consumption (when idling to avoid detection)
- Unwarranted depreciation of the vehicle
- Increased maintenance costs
- Delayed deliveries
- Dissatisfied customers / loss of business
- Diminishing returns
And, all in a good day’s work and because of a seemingly innocent, extended break, it can cause frustration and turmoil throughout the business. Of course, the problem becomes even worse if the timesheets are handwritten, where the fleet operator has to take the driver’s word for it.
Fleet managers are now able to use a vehicle management system to track trips down to the time the engine started or stopped, the time it took for the trip to be completed, the route taken and how much fuel was consumed. To that end, timesheets can be automatically produced using real time events provided by the ECU on each vehicle, even with minimal or no idling. Questionable timesheets can be a thing of the past.
7. Reduced maintenance and labor costs
Reduced maintenance costs
Timely and preventative maintenance have not only proven to extend the lifespan of a vehicle or piece of equipment. They have also proven a valuable strategy in reducing maintenance costs. Routine maintenance according to the specifications laid out by the manufacturer of each vehicle or piece of equipment is probably the only way — at least the most effective one — to keep fleet assets from malfunctioning or breaking down. Various statistics have shown that a well-maintained fleet can last up to 80% more than one that is not. Therefore, in reducing maintenance costs and the headache of unscheduled replacement of vehicles, this is not a number to be taken lightly. Especially in small fleets, it may make the difference between making or breaking the business.
Reduced labor costs
From fuel fraud and falsified timesheets, to bad driving behavior and poor communication over maintenance, to unexpected vehicle downtime and lost labor, these are all potential candidates to serve in increasing labor costs. And these are all issues that can be mitigated or entirely avoided.
Automated, personalized reports of all sorts, driver scorecards, DTC alerts and other notifications and mileage tracking with scheduled maintenance to go with it, can help fleet managers drastically reduce labor costs by reducing wasted effort and optimizing standard operating procedures for performance. In fact, a vehicle management system can help do all these, at a fraction of the time and cost.
8. Tax deduction and insurance benefits
When the time comes for a fleet manager to do the taxes for their fleet, they do have their work cut out for them. Extracting information about trips and mileage, and indicating which trips were made for business purposes is one of the greatest causes of headache for a fleet manager. Above all, it takes time and effort and it draws their attention from the more important things at hand.
A vehicle management system already has all the information required collected. Gathering, then, all that information in a comprehensive report that complies with the IRS guidelines is actually quite easy. In fact, the fleet manager can make quick work of it, sending a well structured Excel file to their accountant in just a matter of minutes. Granted that, they can turn their attention to managing their fleet without disrupting their workflow. And, of course, their accountant can do the work for their deductible expenses, knowing there are no errors in the provided information.
Lower insurance rates
Employing a vehicle management system can also produce a few happy side effects. For example, one of them is the potential to enjoy lower insurance rates.
A well managed, well-maintained fleet can considerably reduce road accidents due to some mechanical failure. In like fashion, monitoring driver behavior can help managers provide the training required for their drivers to improve their driving style. In fact, there are plenty of safe driving courses available. At least some of them are state certified. Also, employing drivers that are state-certified for safe driving has its own benefits. Several insurance companies will lower insurance rates for a fleet that has this type of certification.
9. Improved capacity, more growth
Managing a fleet at a fraction of the cost and time it used to take is one of the greatest benefits a company can reap from using a vehicle management system. Service capacity that has improved at least twofold invites growth like nothing else.
Optimizing cost centers, reducing waste and maintenance or labor costs can keep a fleet in order, but doubling its capacity invites new business and keeps customer retention to a maximum. Of course, a vehicle management system can do just that.
10. Driver satisfaction and retention
Of course, a business that runs well, can bring some extra benefits to staff and stakeholders. Keeping drivers happy is always great news for business.
Using a vehicle management system comes with some extra perks toward keeping drivers happy. To that end, fleet managers can ensure sufficient motivation just by using driver scorecards. Better-performing drivers can enjoy a reward, such as an annual bonus or earn “best employee” status. Perhaps even get a standard raise or promotion when certain goals are reached.
Driver satisfaction is of paramount importance to driver retention. Not only does it serve towards better collaboration and smoother operations; it can also help towards improved customer relationships, customer retention and satisfaction, as well as growth in business.
11. Better customer service, happier customers
Better customer service
Making sure every aspect of the fleet is in perfect working order means a minimal amount of things that can go wrong. That is an advantage that helps build a good reputation for the company, improve deal flow and welcome new business without worrying about the quality of customer service.
Acting on the results and recommendations from the automated reports a vehicle management system has to offer in time, can help preserve and further improve reputation. At the same time, when a fleet is known for its efficiency and high-quality service, it will attract more new customers; and probably the best talent available in the market, to help staff the growing parts of the business.
A happy customer can bring a double advantage. On one hand lies customer retention; on the other hand we have word-of-mouth recommendations. At any rate, for a fleet manager to gain this kind of advantage, they need to be able to track customer satisfaction. Besides crew evaluation functionality on the system, a trip log can offer insights on delays and route optimization, as well as driving events, such as speeding, which would indicate less than ideal time management or irritation on the driver’s side. Besides, as mentioned, happy drivers and crew play a great role in keeping customers happy. And, surely, these valuable insights can help reach that goal; that is, retaining your customers and bringing new business, daily.
Managing the fleet of tomorrow, today
A vehicle management system can serve to improve the bottom line of any business that needs to employ a fleet of vehicles. Having the right crew, fostering professionalism and leveraging safe driving practices will prove exceptionally beneficial. Cultivating a culture of collaboration will contribute to a safer, well-maintained fleet, reducing unwarranted setbacks to a minimum; eliminating even. Such a culture will benefit the company in optimizing cost centers, eliminating behaviors of self-interest among the crew. And it will help optimize fleet performance and efficiency beyond expectations.
To that end, there is hardly any room left for DIY solutions in vehicle management. Customized Excel files and handwritten timesheets will no longer be helpful in effective vehicle management and optimization for performance, efficiency, driver retention and customer satisfaction. Nor does it facilitate the ability to remain competitive. Fleet management technology is here to help. And using it today, a fleet operator can reap the benefits of tomorrow, today.