Fleet

What is Fleet Management?

by Jason Cockerham on May 11, 2021
 
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Organizations that run commercial fleets need standardized processes and workflows to efficiently manage a wide range of vehicles throughout the asset life cycle, from initial acquisition to final disposal. Along the way, they need reliable systems for tracking and managing everything from vehicle maintenance and repairs to driver safety and satisfaction.

When it comes to fleet management, success is a moving target, but modern fleet management software helps streamline workflows, driving down costs.

What is fleet management?

Although "fleet" is itself an industry, there are many types of organizations within it, each with different concentrations of vehicles, including haulers, sales, service, utilities, emergency services, and public transportation. Regardless of the differences, there is a single, broad definition of fleet management.

Fleet management is the set of internal workflows an organization develops and implements to manage a commercial fleet, including everything from the selection criteria for new vehicles to the calculations behind repair-or-replace decisions.

The goal of fleet management is to find and implement new efficiencies to reduce costs while ensuring compliance with industry best practices and government regulations. Therefore, a short, one-phrase definition of fleet management could be "the ways an organization gets the most value from its fleet using the smallest number and amount of resources while still ensuring safety."

Now let's look at why it's an integral part of an organization's success.

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What is the importance of fleet management?

To understand the importance of fleet management, all you need to do is imagine trying to run a fleet without it.

Without standardized processes for finding and fixing issues, maintenance and repair costs skyrocket because now most issues go unnoticed until they have already developed into expensive repairs. For example, missing a few simple oil changes can lead to the need to rebuild or replace an engine. If a technician had done the right maintenance task at the right time, the cost in parts and labor would have been almost small enough to be a rounding error. Instead, the organization now has to pay for skilled labor and expensive parts on top of the money it's losing due to diminished capacity. If that vehicle weren't in the shop up on the lift, it would be on the road contributing to revenue.

Without data at every stage of the vehicles' life cycles, it's impossible to generate the business intelligence organizations need to maximize value and boost the bottom line. For example, something as simple as tracking the frequency of a specific type of repair delivers critical insights into which parts and supplies vendors to use. And once the fleet manager has reliable data on the total cost of ownership of a make and model in the fleet, they can make the right decisions about when to retire those vehicles instead of sinking more into maintenance.

In the end, without fleet maintenance, organizations struggle to see both where they are and where they should be headed.

What does a fleet manager do?

The fleet manager's responsibility is to take the principles of fleet management and develop specific sets of procedures and workflows to maximize asset value.

And because their job affects the fleet at every stage of the life cycle, the scope of their responsibilities is wide, and it can include but is not limited to the following:

Retaining drivers

Based on the amount of coverage it receives, it's easy to think the widespread switch to self-driving vehicles is just around the corner. Tesla claims it will release a full self-driving feature as a subscription service as early as 2021. But roadblocks remain, including everything from concerns over parking, insurance, and even the moral implications of having an algorithm inside the car make life-and-death decisions in the case of unavoidable accidents.

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In the meantime, fleet managers in trucking face a longstanding and increasing shortage of drivers.

Fleet managers need to develop new ways to attract and retain drivers. Some are setting up mentoring programs to help bring people into the industry, while others focus on improving working conditions for current employees.  

Ensuring safety and compliance

It's hard to calculate the total cost of even a small accident accurately. There are the immediate costs that come from missed delivery deadlines. Later, you can add the costs of repairs, including towing fees, labor, parts, and even shipping for any parts not already in inventory.

The costs continue to climb with fines if a government agency can draw a direct line from the accident to a failure to follow regulations. They're harder to calculate directly, but there are also the costs connected to a loss of customer trust and industry-wide reputation. No one is going to do business with you if they can't trust you can deliver on promises.

Fleet managers are responsible for setting up and overseeing the workflows that ensure safety and compliance. They need to determine what work is required, who's responsible for completing it, and then create a reliable way to track and document everything so that the information is both safe and easily searchable. When it comes to compliance, doing the work is only the first half. You have to be able to quickly prove you did the work, too.

Reducing costs

For many organizations, achieving the first two responsibilities of a fleet manager is not hard as long as they have an unlimited budget. Attracting drivers and keeping them happy is simple if you can pay them a lot while showering them with perks. Staying compliant is much easier if you have an unlimited number of maintenance techs with a deep inventory closet packed with parts and materials. With enough funding, you can accomplish almost anything, regardless of how inefficiently you work.

But in the real world of business, fleet managers strive to achieve more while spending less. They track every aspect of their operations to get more value from their assets using the least amount of labor and resources.

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Forecasting future needs

It's not as simple as buying a replacement each time the organization retires a vehicle. Fleet managers need to predict when they will need to purchase new vehicles and which vehicles will best serve their future needs. If a taxi service plans on increasing its presence at the airport, it makes more sense to start upgrading to a mix of larger models with more trunk space and minivans instead of doing straight replacements of their existing sedans.

For many fleet managers, the big question is when to start making the shift to electric vehicles (EVs), which currently appear to represent the future of the industry. They offer many advantages over internal combustion engines in terms of maintenance. Fleet managers would never have to hold another spark plug in inventory. But there are also new costs, for example, related to the charging station infrastructure both onsite and on the road.

##What is fleet management software, and how does it support fleet managers?

Fleet management software is the critical tool fleet managers need to take principles and turn them into efficient workflows. It's the tool that helps fleet managers do more work while spending time, energy, and money.

Capture, safeguard, and share critical data

Many of the benefits of modern fleet management software are the direct result of how it handles data. Traditional systems based on paper or spreadsheets require a lot of manual entry, creating endless opportunities for small mistakes to creep into the data sets. And then, even once you've collected the data, there's always a risk that you can lose it.

Modern fleet management software is backed by a cloud-based database that makes it easy to capture data, keep it safe, and make it accessible to the entire department from any Internet-connected device, including desktops, laptops, tablets, and smartphones. Managers no longer run the risk of generating data only to see it corrupted or lost.

Standardize and schedule inspections

Vehicle inspections are critical to finding and fixing small issues before they have a chance to develop into bigger problems. It's always easier to deal with a paint chip than work with a growing patch of rust. But the only way to ensure the maintenance team finds these small problems is with regular inspections that systemically cover every vulnerable part and system. Toyota claims a single car can have as many as 30,000 parts. And the average modern car has between 30 to 50 onboard computers connected to between 60 to 100 sensors. It's impossible for any one maintenance technician to remember to check everything.

Operatorcompanion@2xFleet maintenance software standardizes the process with easy-to-follow pass/fail checklists. While the technician goes through the list, if any part or system fails, the tech can quickly generate a new associated work order from inside the system, alerting the fleet manager of the need for additional work.

Standardize and schedule preventive maintenance and repairs

Inspections can lead to on-demand work orders, but the software also makes it easy to schedule preventive maintenance tasks, and the fleet manager can set them up based on meter or time. For example, they can schedule an oil change after the vehicle hits a specific mileage. Or, they can schedule a switch from winter to summer tires in early April, regardless of the vehicle's use over the previous season.

Before generating a new work order, for both on-demand and preventive, the fleet manager can ensure technicians complete the right work the right way by including everything they need to work efficiently, including:

  • Comprehensive maintenance and repair histories
  • Step-by-step instructions
  • Customizable checklists
  • Associated parts and materials

Techs have what they need to do the work the same way each time, ensuring the department consistently uses industry best practices. At the same time, having access to the vehicle's maintenance and repairs histories is important when dealing with a new problem, and the tech needs to rely on efficient troubleshooting.

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Leverage data into actionable business intelligence

Here is where the fleet manager can pull a lot of value from the software. Because it's easy to capture data and keep it safe, the department knows it can trust the numbers. Using the built-in reporting module, the fleet manager can use the software to "crunch the numbers" for invaluable insights into operations.

For example, they can see which vehicles are giving the maintenance team the most trouble. If a specific make and model is prone to a certain problem, the fleet manager can:

  • Expand the associated inspections to catch the issue earlier
  • Double-check that the current maintenance procedures are appropriate
  • Reach out to vendors to see if they can track the issue back to inventory
  • Start an early-retirement program for that make and model

Using reports, fleet managers can also accurately track total cost of ownership to make informed decisions about when to repair or replace a vehicle.

In the end, increased visibility on all aspects of the operation enforces accountability with vehicle manufacturers, parts and materials suppliers, and the maintenance technicians.  

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CEO's summary

Fleet management is the internal workflows an organization develops and implements to maximize value from their vehicles. It touches every stage of the asset life cycle, informing everything from purchasing to decommissioning vehicles. Without proper fleet management, organizations face increased costs and decreased predictability. They don't know when and how best to maintain the vehicles, creating a costly and potentially dangerous situation. Fleet managers play a key role in keeping the fleet productive and on the road. They are responsible for attracting and retaining drivers, ensuring vehicles and safe and comply with regulations, and preparing the organization for the future. Fleet management software is the most important tool in the toolbox for managers. Because of how it simplifies capturing, sharing, and leveraging data, managers can develop and enforce best practices and leverage data into actionable business intelligence.

Jason Cockerham
About the author

Jason Cockerham

Jason is a storyteller at heart with a career spanning everything from film and TV to iPhones. Just don't expect much before his first cup of coffee.

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