There will be a different degree of focus on fleet management in every business in the UK, but the common thread is that the function of fleet management has a considerable influence on all departments of an organisation and, more specifically, on the bottom line results of the business. What a well-run and progressive business will soon realise is that fleet management done well will improve the efficiency of the business as well as the financial results, but done badly, fleet costs can be a huge drain on resources.
So here we have put together some key examples of how fleet management should function, and what the effects will be if this is not done well.
Fuel usage
While you can’t control the unit cost you pay at the pumps for petrol or diesel or for electricity used to charge EV batteries, you can monitor and manage how much fuel is used. Monitoring fuel costs is a key fleet management function, and this can be controlled through:
- Better journey planning – no wasted journeys, minimising ‘empty’ journeys where a vehicle isn’t carrying a load, avoiding busy routes where vehicles are stuck in traffic, using the most efficient vehicles for each journey
- Driver behaviour – training drivers to avoid idling and excessive speeds
- Where to fuel – planning journeys so that vehicles can re-fuel without going out of their way
- Fuel cards – sourcing and signing-up for discount fuel cards at certain stations
The implications of not doing all these things are obviously excessive fuel costs, but poor journey planning also effects the general efficiency of the business, while poor driver behaviour can lead to excessive wear and tear on a vehicle and, in extreme cases, could lead to speeding fines and therefore extra compliance costs.
Compliance
There are a number of management tasks which come under the banner of ‘compliance’ and these can all have cost and legal implications if not managed well.
- Working time directive – you need to monitor driver hours so they are not driving longer than the working time directivestipulates. Most businesses use a tachograph for this, but there is tracking software that can help you also.
- Service and MOTs – from a health and safety point of view you must maintain vehicles in safe working order, but this also helps with the efficient running of vehicles in terms of fuel usage.
- Licences, insurance and taxation – you must have robust systems in place to check and renew individual driver licences, insurance policies and vehicle taxation
Lapses in any of these systems can lead to costly fines and potentially drivers being banned, which can have organisational implications if you therefore don’t have sufficient drivers. In extreme cases this can result in accidents and injuries. Compliance lapses can also lead to higher insurance premiums and potentially bad publicity for the organisation if fines and other compliance issues get into the public domain.
Technology
In recent years there have been numerous software packages developed to help the fleet manager with the planning and overall visibility of their function. In this instance, not using technology will simply lead to a failure in reducing costs and the general inefficiencies which may be prevalent throughout the business. GPS tracking of vehicles, journey planning software and communications software all help with managing jobs and vehicles out on the road, and give the fleet manager a clear outlook on where the function is operating well and where improvements can be made.
Vehicle selection
A good fleet manager will have a fleet set up with the right vehicles for the type of journeys and tasks they are undertaking, and this will be under constant review as operations change, so this involves matching a vehicle’s size, storage and fuel efficiency with the type of journeys required by the organisation. So do these involve long or short distances, or both? Carrying colleagues or solo? Delivering and picking up goods? Transporting material and equipment? Operations can change day-to-day and you may not always have the perfect vehicle available, but if you manage vehicle selection as closely as possible you will see cost savings, better employee morale and reduced wear and tear on unsuitable vehicles.
KPIs
Key performance indicators are a vital tool to the fleet manager and enable the department to set targets and monitor ongoing performance against them. As an improvement tool KPIs need to be realistic and achievable, and in so doing can improve productivity and morale. If you don’t implement and monitor KPIs then the fleet management function can simply drift and become stagnant, and a drain on the organisation with unmotivated employees, and almost certainly contributing rising costs.
To learn more about what constitutes excellent fleet management and how it can save costs and improve the performance of your business, contact Total Motion today.
