Jun 07, 2019 0

What is fleet management and what is its purpose?

Fleet management is more than simply owning and operating a vehicle. A full understanding of fleet management is a challenging proposition as actual fleet management is the expertise and knowledge of a complex set of principles required to manage a fleet of vehicles effectively and efficiently. A professional and experienced fleet manager knows the difference between purchase decisions versus lease, complex financial theories, life cycle modeling, the present value of money, opportunity cost principles, the cost versus benefit analyses, and asset utilization principles.

In simple terms, the primary aspect of a fleet management system is to provide low-cost transportation solutions to customers, which may or may not include corporations owning vehicles.

A fleet’s profitability and success depend on a network of moving pieces. Organizations are tasked with balancing big-picture fleet responsibilities along with being on the front lines when it comes to daily concerns – everything from optimization and route planning to monitor and improving driver behavior. Below are the alternative transportation solutions availed by effective fleets for transporting people and supplies while reducing expenses:

• Owned vehicles

• Leased vehicles

• Pooled and shared vehicles

• Commercial rental vehicles

• Personally-owned vehicle mileage reimbursement

• Public transportation

How fleet management system works?

All vehicles produce massive amounts of valuable data. It is easy to retrieve the data when they are connected to a fleet management system, as it allows the fleet manager to access the information and make sense of it.

1. Vehicle segment:

Vehicles are equipped with telematics units allowing the fleet manager to capture data on what the vehicles are doing. This includes insights like fuel use, handling, idling, and speed, along with when the engines are running. Moreover, an in-cabin device can also be installed for improving communication and efficiency on the road. This way, the drivers can receive input information and live route updates to share with back-office staff.

2. GPS segment:

GPS allows the fleet managers to pinpoint the location of every vehicle in their fleet, enabling them to know where their drivers are and what routes they have taken.

3. Network segment:

Satellite communication allows the fleet managers to keep track of the vehicles in their fleet while enabling them to communicate with the drivers even when they are outside of mobile coverage or in remote areas.

4. Back Office segment:

A fleet management system is designed to easily integrate with a business’ other applications and systems, enabling the managers to send driver timesheets to proof of delivery, and payroll. On the other hand, this segment offers ‘reporting’ where the managers can see the vehicles on the map and visualize the progress and latest business trends.

Why is fleet management critical?

Companies and organizations must handle the tightening capacity and growing demand alongside other industry challenges like rising fuel prices, driver shortage, and other industry regulations. When managing a fleet in its entirety, including daily tasks, it is critical to keep the companies operating profitably and smoothly while creating a comfortable, safe environment for drivers. This is where fleet management comes into the play.