Over the past several months, we’ve addressed many new technologies that will soon be applied to trucks as manufacturers work to address government-mandated fuel economy and emissions regulations. While there is no doubt these technologies will ultimately make trucks more fuel-efficient, it will be many years before the typical vocational fleet has enough of these trucks in operation to have a significant impact to the bottom line as a result of reduced fuel consumption. This long-range forecast of overall operating cost reductions is clouded by the specter of increased acquisition costs, higher maintenance costs, and the ever-present issue of added technologies being a match to your drive and duty cycles. For example, a typical low mileage inner city utility fleet will probably never drive enough miles for increased fuel economy to offset the higher acquisition costs for the next generation of trucks.
Addressing the Total Cost of Vehicle Operations
As we wait to see the overall impact of pending regulations/technologies, fleet managers are still typically asked (or told) to do more with less. Conventional fleet management tools can help, but what fleet managers really need is a tool that can take their job to the next level. Fortunately that tool, in the form of enhanced telematics, already exists and has reached maturity. Many fleets are already using telematics in one form or another, but in most cases a fully integrated telematics plan is lacking, which would address the total cost of organizational operations as opposed to just looking at the vehicles or another aspect of operations.
It is an unfortunate fact of life that managers are far too often judged by how well they manage their own budget centers (dollars earned or spent) instead of looking at their impact to the total bottom line. Telematics, on the other hand, is a tool that can be used to manage multiple aspects of organizational operations. This means that in an ideal world, the costs of implementing and operating a fully integrated telematics system should be spread across all budget centers that can benefit from such a system. The big challenge for any company actively using, or considering using, integrated telematics is the ability to quantify these benefits and then properly allocate the costs. With a properly designed system, the fleet manager stands to be one of the big winners, and as such, should actively champion the use of an integrated system.
In the Beginning
What we think of today as telematics started as a basic GPS system typically used by business operations managers as a tool for keeping track of where their fleet assets were and then using that information to improve vehicle dispatching. The next logical development was the addition of mapping and routing tools to show the vehicle driver how to get to their next location. In many cases, the direct fleet applications were not even considered and the fleet manager had little to no say in how the system was configured. Unfortunately, the GPS hardware was often considered to be part of the vehicle and the cost hit the fleet manager’s budget center. In most cases, some minimal benefits accrued to the fleet manager in the form of reduced vehicle mileage which translates to less fuel and extended service intervals – but these were considered to be incidental benefits. As a result, many older fleet managers are somewhat negative in their views of GPS systems (they don’t even think in terms of telematics).
Today’s telematics systems can be fully integrated. In addition to the traditional GPS capability (significantly enhanced from original systems), they can provide several additional functions (depending on the system installed), such as vehicle condition monitoring; driver performance and behavior management functions: inventory management (using RFID and / or optical scanning technology); drive and duty cycle mapping; active and passive idle management functions; and other functions as required. The information provided can be utilized to better manage other aspects of the organization’s operations. In the case of the fleet manager, this may include items such as:
- Fuel usage tracking reports
- Vehicle mileage and utilization reports
- Maintenance scheduling
- Low tire pressure alerts
- Exception vehicle powertrain alerts (low fluid levels, low oil pressure, overheating, etc.)
- Truck-mounted equipment monitoring (when appropriate sensors are integrated into the equipment)
Obviously, the applications of vehicle telematics can vary by the type of business associated the vehicle in question – but the list of potential groups that can benefit from a properly designed telematics system include:
- Sales & Marketing
- Accounting & Finance
- Human Resources
- Safety / Risk Management
In addition to the functions directly related to fleet management, other features such as inventory management (possible weight reduction); vehicle routing (reduced mileage and potentially less idling time); driver behavior modification (improved fuel economy, reduction of vehicle wear, reduced accident rate); can indirectly impact the fleet bottom line. Therefore, fleet managers should become active champions of telematics and try to get buy-in from the other budget centers in their organizations to share the cost of installation and operation of fully-integrated telematics systems for their fleets. This means fleet managers need to educate themselves as to how telematics can be used across their organization, be it government or commercial, to improve service while reducing costs.
One fleet I worked with over the past several years offers a prime example of how integrated telematics can be utilized. This company provides maintenance and installation services for restaurants and food vendors over a large area. Most of their service trucks are based at the technician’s home and are remotely dispatched.
When a customer calls the service desk with a problem, the service writer, who is a trained technician, makes a determination as to the probable cause of the reported problem. They can then call up the locations of all service trucks within a given distance from the customer and query the inventory on each truck to determine which unit has the probable required parts on board (all parts over a certain value are RFID tagged). They then dispatch the closest available technician who has the required parts for the job.
The dispatch triggers a time clock function that tracks the travel time to the job. It also establishes a geo-fence around the job site and when the assigned vehicle breaks the fence, a computer calls the customer and tells them that the technician is a certain time period out. When the service truck reaches the GPS-tagged location, the travel clock stops and the repair clock starts. Any part taken off the service vehicle is read by the RFID scanner in the door frame and is automatically charged to the job. If it is put back on the truck (not needed), it is automatically removed.
When the job is completed, the technician closes the work order and the repair time, plus all parts used are automatically charged to the job. A restocking order is issued and replacements for the parts used are shipped to the technician’s home by an express delivery service – thereby reducing the need for the technician to travel to the service center. A fixed period of time after the job is closed out, the computer calls the customer to determine if the repair was completed satisfactorily or – if the job was not closed out for some reason – provides an update as to when the repairs will be completed.
So how has this helped the fleet manager? The vehicle is probably driving fewer miles, resulting in less fuel consumed and less vehicle wear. The inventory management system means less weight on the truck (they are not carrying three of every part anymore). The trucks are more productive, so the overall fleet size may possibly be reduced – saving capital and operational dollars. At the same time the fleet manager is tracking the condition of the vehicle, knows when it will be due its next service (based on average daily mileage and service benchmarks), and can determine if it needs to be brought in for any monitored system repairs. This is especially valuable in the case of a driver’s home-based vehicle. Obviously, a system such as this is not cheap to implement - but the benefits are far-reaching for multiple organizations within the company. At the same time, the ability to share the costs makes it affordable for everyone.
If you would like to discuss this or any other fleet issue with the NTEA, please call 800-441-6832