What Does Fleet Operations Mean? A Simple Introduction

February 8, 2020
What Does Fleet Operations Mean? A Simple Introduction

Fleet operations are the processes that go into transporting items, using resources such as vehicles, drivers, fuel, spare parts, and so on. Fleet management means organizing and coordinating these resources and the operations. It helps streamline processes involved in the logistics of goods.

Effective fleet management systems give you easy access to all the information you need on the performance of your fleets and associated assets. The system records and reports key attributes so you can improve efficiencies, increase productivity, reduce downtime, and drive down costs. The system also aims at reducing administrative processes during a delivery to optimize driver time management. The basic idea behind managing fleet operations is to maximize how your organization uses vehicles to reduce the costs associated with transport.

A wide variety of industries and businesses use fleet management. These include:

  • Transportation and logistics
  • Food and beverage industry
  • Oil and gas delivery
  • Construction and repair services
  • Couriers
  • Tech industries that rely on hyper-local delivery systems: e-commerce, grocery delivery, and food ordering

Thus, the proper tracking of fleet operations and effective management of logistical resources is a crucial element of modern business operations. Its impact can have far-reaching consequences on global emissions and fuel consumption.

So, how can fleet management help you and your organization?

Benefits of Fleet Management

Fleet management can be expensive. Why do businesses invest in it?

  • They want to increase productivity and efficiency.
  • Fleet management helps reduce fuel waste, minimize effort, and save on operational costs.
  • A fleet management process also ensures that a firm complies with all regulations.
  • It helps manage the entire life cycle of commercial vehicles. This includes acquiring the right asset at the best price, paying less in insurance premiums, decreasing maintenance costs, and recouping the maximum possible resell value.

The Value of Data (New and Old)

Real-time tracking and visibility into fleet operations provides enormous amount of data. This data can help you reduce associated risk, hedge against outside factors that cause delays, conduct timely repairs, and predict fuel consumption. It also helps monitor vehicle movement so you can swiftly intervene to prevent any disruptions.

Of course current data is invaluable, but don’t forget about older data! If you analyze past data, you can find insights to extend vehicle life, optimize delivery routes, and increase the earning potential of the asset.

Customer and Driver Satisfaction

Other benefits of a sophisticated fleet management includes exceeding customer service expectations and increasing driver satisfaction. It also promotes responsible vehicle use and ensures driver safety and well-being.

Now that you know why fleet operations and fleet management matter so much, let’s talk about the different parts of fleet operations.

Components of Fleet Operations

Fleet operations has a few vital sub-components. Essentially, they involve optimizing costs to increase revenue, managing the human assets to maximize productivity, and maintaining the vehicles to improve efficiency. Let’s look at some parameters that can help you improve fleet operations.

Vehicle Maintenance and Acquisition

Of course, your vehicles are a key asset of fleet operations. A well-maintained vehicle fleet saves cost on repairs, reduces delays due to breakdowns, protects your company’s profitability, and stays in service for longer.

Vehicle maintenance involves tracking fuel consumption, reducing insurance and running costs, instituting driver walk-around checks, and conducting regular maintenance checks. It makes sense to create detailed defect reports during inspections and audits and to fix those issues quickly. As a result, many firms constantly monitor vehicle operations for mechanical problems and efficiency.

If you have top-quality vehicle maintenance, you can also consider buying used assets rather than new ones. This can save you a lot of money at the time you buy!

Cost Reduction

Every firm has a constant strategic goal of reducing costs. So that’s one of the key components of fleet management.

An effective fleet manager oversees vehicle acquisition and maintenance costs, fuel consumption, and fuel costs. He or she uses telematic devices to track key metrics, such as mileage and diagnostics. Global positioning systems and telematics help automatically detect accurate global vehicle location.

Other data-collecting devices, such as dash cams and heat detectors, can also provide insights on engine status, vehicles performance, and driver behavior. You can analyze relevant information from this data to figure out how you can reduce costs. This can include decreasing fuel cost per mile, reducing vehicle purchase costs, reducing distance traveled per delivery, and optimizing fuel consumption.

The recent trend of electric vehicles also presents new issues. Electric and hybrid vehicles are more expensive to buy than traditional fuel-powered vehicles. But they have lower running and performance costs. In most places, they also have lower taxes than traditional fuel-powered vehicles. To figure out what works best for your organization, perform a cost-benefit analysis using data from past trips.

Fleet Tracking

Real-time tracking of vehicles lets you proactively control vehicle movement if necessary. For example, any outside factor such as traffic, accident, or road construction along a particular route can cause delays. These delays can disappoint clients, increase employee wages, reduce productivity, and increase fuel costs. Through real-time location tracking and monitoring, you can quickly make decisions to avoid these circumstances. To do this, you’d need a single dashboard that provides all the information you need to make smart decisions.

Route Planning and Optimization

A meticulously planned delivery route can significantly increase the output of your firm’s assets. An optimized route means that the vehicle travels a shorter distance per delivery. This increase the number of deliveries in a day, decrease fuel consumption, ensure timely delivery, and improve efficiency. Effective transportation management can thus reduce costs improve customer satisfaction. UPS, for example, uses its proprietary route-optimization system to save up to $400 million, 10 million gallons of gas, and 100,000 metric tonnes of greenhouse gas emissions per year.

Route optimization uses real-time and historical data of the vehicle and the environment. The algorithm will analyze the current location, traffic conditions, driver behavior, past trips, vehicle performance, and hundreds of other parameters. It uses these to design the best route for each vehicle in real time. It can also reroute vehicle paths in real-time based on live data. Machine learning-based models constantly further optimize the delivery by suggesting grouping of orders, recommending better-suited vehicles, and predicting real-world problems, such as traffic conditions and route restrictions.

Driver Health and Safety

The health and safety of your drivers is vital. A regularly maintained fleet of vehicles will reduce the number of accidents. If an accident happens, it’s important to empower drivers to follow insurance reporting procedures. Robust driver behavior tracking and management can help improve focus and avoid overburden. Regular training and evaluations of drivers will also improve driver and vehicle performance, and reduce the number of accidents.

Compliance

Government regulations and legislation change all the time. The best practice is to have a regular and thorough process to ensure compliance. That means daily vehicle and driver checks, regular engine performance checks, inspection sheets, defect reporting, and so on. The fleet manager should have written vehicle maintenance summary records for each vehicle. It’s important to regularly document this information for auditing purposes. Analyzing this data can also show you areas of improvement. Furthermore, having a full trail of information also helps during accidents in case a claim or investigation is required.

Analysis and Prediction

Firms with a lot of vehicles can generate huge amounts of operations data. Some of the key data points are location, fuel costs, vehicles performance, speed, fuel consumption, and engine use. If you’re a fleet manager, then you need to sort through the unnecessary information and generate reports focused on the metrics that matter. How? Sophisticated data-collecting devices are available nowadays, but knowing what to measure is critical. The right analysis can help save you money. It can also help you predict the next vehicle repair date, anticipate traffic conditions, and estimate maintenance costs. Predictive analysis also allows you to forecast the demand and fleet management budget, so you know what you’re likely to face in the future.

Conclusion

Fleet operations means organizing and using vehicles and drivers for transport and logistical purposes. Businesses across a wide variety of industries rely on fleet management to reduce costs, protect profitability, improve efficiency and productivity, maintain their vehicles, and meet or exceed government regulations. And that means fleet operations is likely to be a critical component in your business.

This post was written by Aditya Khanduri. Aditya currently handles product and growth at Cryptio.co, and he's also built a couple of B2B products. He's proficient in data analysis with Python and has worked with multiple startups in the blockchain and artificial intelligence sector.


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