By next year, industry watchers expect organizations to invest $30 billion in fleet management.
Since fleet management is more than merely owning and operating vehicles, such investments are crucial to cost containment. The more effective your fleet management, the more you get out of every car.
If you are wondering, “What is fleet management?” Here is an in-depth guide to help you grasp the importance of administering your fleet.
What Is Fleet Management?
Fleet management is the administration of a pool of commercial vehicles a business uses at scale.
A fleet can be anything from two vehicles or more that an organization relies on. On average, an organization will run between 250 to 499 cars in a fleet.
With fleet management, economies of scale kick in the more significant the number of vehicles, which increases the efficiency.
You don't need to own all (or any) of the vehicles in your fleet. Some organizations choose to rent the cars they need and focus on managing them instead.
Why Do You Need to Manage Your Fleet?
At its core, fleet management is all about process optimization and improvement. Here is a look at some of the purposes that fleet management can serve to help highlight process efficiency.
Keep Vehicles Running
At the end of the day, if your vehicles aren't on the road, then your business isn’t achieving its targeted objectives. As such, you need to ensure that every car in your fleet can meet the requirements to continue being on the road.
Fleet management helps you reduce the amount of downtime per vehicle. Through deploying necessary service at the right time, you can minimize your breakdown rate.
Maintaining Compliance
Part of ensuring each vehicle remains operational is a remaining complaint. Thus, your fleet must meet the necessary rules and regulations.
Furthermore, today's fleet management needs to meet environmental conservation requirements.
To this end, you must know the requirements of all regulatory bodies. These include the Environmental Protection Agency and the U.S. Department of Transportation. You also must pay attention to the International Fuel Tax Agreements requirements.
As you deploy your maintenance regimen, marry your objectives to existing regulations. That way, you meet regulatory requirements and improve your fleet’s green credentials.
Reducing Operational Costs
The viability of your fleet is pegged in large part on its operational costs. Therefore, fleet management enables you to keep an eye on this metric to address and concerns.
With regular maintenance and service, you get to reduce the downtime of each vehicle. Taken as a whole, improvements in the time on the road for each car will mean more productivity.
In addition, fleet management helps you monitor each car’s performance information. You can dig deep into this data to spy out areas that need improving to boost the fleet’s output.
Maintain Car Resale Value
If you own your fleet, you need to think about resale value as you likely will end up disposing of some cars down the road.
A robust fleet management strategy can help you stick to the manufacturer's service schedule. That enables you to keep the car in top shape and also maintain stellar maintenance records. These records will prove vital in proving a car’s service history to future buyers.
But what if you lease vehicles for your fleet? Your leasing company expects you to return the cars in good condition. The contract you sign specifies what passes for good conditions.
Proper fleet management can help you meet this requirement and avoid extra charges at the end of your lease.
Fleet Management Strategies to Adhere to
As with any other form of management, the strategy you use has a hand in the results you achieve. With that in mind, let’s look at some strategies you can rely on to keep your fleet in optimal condition.
Choose a Fleet Management System Tailored for Your Needs
There are a ton of options for a fleet management system in the market today. If you want to impact your fleet meaningfully, you need to select a system that can most adequately address your unique business needs.
Features such as real-time order tracking, cloud reporting, and visibility into analytics should come as standard.
Keep in mind that the flexibility of the management system you choose highly dictates its usefulness. You, therefore, can't compromise on customization.
When you purchase a system, ensure that it’s capable of effecting customization without heavy-duty information technology (IT). A system that will require you to invest significantly in IT to enable customization will be costly to scale.
Have a Strict Warranty and Maintenance Plan
Although it might seem simplistic, sticking to a strict maintenance and warranty plan can take a hit when difficulties arise.
For example, a strike by your workers or a natural disaster can potentially cause you to slack on enforcing such a plan.
Failing to stick to the plan can adversely impact your financial forecasting. The cost of unmaintained assets does make your planning more unreliable. In cases where warranties expire, you may be forced to replace parts or entire cars ahead of time.
To avoid such problems, ensure your fleet management system offers options on maintenance alerts. Such a capability keeps you on track with your maintenance and warranties under any conditions.
Conduct Audits to Uncover Hidden Costs
You need to regularly schedule thorough internal audits of your fleet management system to find areas where costs are hidden.
For example, say you predict higher fuel prices in the near future. In such a scenario, auditing your fleet’s fuel consumption using the system's analytics can help you develop a plan for better fuel efficiency.
Once the prices rise, you will mitigate skyrocketing costs that you would have incurred without any planning.
To make your audits more effective, conduct frequent consultations with other teams and departments. The information you get can help you map and analyze every component in your fleet to unearth hidden costs.
Get the Most out of Your Fleet
Operating a fleet is a significant investment for any business, and as such, you need to get your money's worth. With fleet management, you can keep an eye on your vehicles and ensure top productivity. Seek to find an expert opinion on the question, “What is fleet management?” to discover how to maximize your assets.
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