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ROI with Fleet Management

ROI with Fleet Management

Return On Investment (ROI)

ROI Fleet Management | Fleetistics

ROI with Fleet Management

Discovering the Hidden Savings with GPS & Telematics!

No matter what industry you are in whether it be HVAC, Construction, Landscaping, or Law Enforcement we all face the same challenges. How do we maximize our bottom-line to increase profit growth? The quickest and most cost-effective way to improve profitability is to reduce expenses.

Fleetistics understands that expenses make up for a large portion of any company’s budget. However, it can be tough looking for opportunities to locate cost savings. Incorporating your telematics solution into your daily tasks can assist with finding savings.

In this article, we will review a wealth of opportunities that fleet managers and fleet operators can use to help improve the company bottom-line.

What Is ROI?

To maximize ROI, you have to first understand what ROI is:

ROI measures the amount of return on an investment relative to the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment, and the result is expressed as a percentage or a ratio such as 3:1. At Fleetistics we like to express the ROI in the number of days to recover the initiial investment and then the benefit in comparison to the monthly subscription service.

 

Where Are the Savings?

Every fleet is unique and requires each fleet manager/operator to calculate cost differently. With our 16+ years in the telematics industry, we have concluded there are two common variables that impact operating costs: vehicle class and vehicle mileage.

If you take a heavy duty (HD) long-haul fleet compared to a light duty (LD) low mileage fleet, you will notice that these vehicles have very different rolling costs per mile. The HD fleet will have higher proportional fuel, maintenance, depreciation and labor costs per mile. There are also several other factors that we need to consider such as
fuel management, reduction in miles, reducing repairs, vehicle maintenance, and driver coaching.

These are all factors that will affect the bottom-line for any organization. How proactive you are in managing these variables will determine your potential savings.

 

Fuel Management

The Fuel Flex Card is one of the simplest ways to help manage cost. Fleetistics offers a fuel card option from WEX called the Flexcard. This card has several great options and features to easily assist in reducing operating costs. Fleetistics has integrated WEX data with your Geotab GPS data for more insight into fuel purchasing and use.
You can view fuel expense data such as:

  • Fuel Type
  • Price Per Gallon
  • Non-Fuel Purchase
  • Security and Protection
  • WEX Mobile App
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When integrated with your Geotab telematics solution, each of these features ensures that your fleet is only using the vehicle only for work purposes. You can also send an alert for unplanned or unauthorized transactions!

These features cut down on fraudulent actions. It will also provide another level of fuel savings.

 

Reduction in Miles = Reduction in Man Hours

Each company is different so the need for man hours and miles will vary. However, if each company can reduce the miles driven from A to B, man-hours will also decrease. By understanding the miles driven between each location, you can see the effectiveness of the routing and scheduling process. Working to reduce the average distance between stops means a lower rolling cost per mile per revenue dollar.

  1. You can monitor the route each driver takes to every stop. Are they taking the most efficient route? If several businesses are in one geographical area, are they completing those stops first or are they bouncing back and forth between stops across town?
  2. Is the driver following, or sticking to, the route plan? Holding the driver to the optimized route plan is essential. If a driver has a favorite spot they like to stop for lunch, add a geofence and view it on the GPS track data to understand the impact on the optimized route. We call this plan versus actual route analysis.

 

Reducing Repairs and Maintenance

Planned and unplanned vehicle maintenance is the one thing that is common among all fleets. As fleet managers know, unplanned maintenance or breakdowns caused by a lack of maintenance, vehicle misuse or aggressive driving can be a costly. This does not have to be the case.

Telematics engine diagnostics data can assist in keeping unplanned maintenance time down by as much as 14%. Interruptions can cost between $100 to $300 per hour. Using your telematics solutions engine diagnostic tool can help prevent large and costly repairs by notifying you of a small issue before it becomes a big issue. Preventing safety issue and roadside breakdowns also avoids costs maintenance related expenses.

 

Driver Coaching

GO Talk Driver CoachBecoming proactive with your fleet is an integral part of your formula for success. Implementing driver training and best practices can quickly reduce fleet operating expenses and help you achieve your ROI sooner.

Not every driver is perfect. Fleets often have good drivers with bad driving habits. These are the drivers you want to target with a telematics solution. The GPS system can see what risky moves they are taking on the road and the built-in driver coaching buzzer will alert them when they are exhibiting unwanted driving behaviors. Driver coaching not only saves the company money but also supports safer driving habits. The goal is to change behavior, not to change drivers.

Here are a few programs and tools we recommend.

  • DriveTRAX – What GPS tracking cannot tell you.
  • Driver Challenge – Raise awareness by creating competition (Gamification).
  • Speeding Violations – Use your reports to see has been violating company driving standards.
  • GO Talk – Verbal instructions through an in-cab speaker to relay a clear coaching message.

Each of these factors offers tangible and quantifiable savings that can be realized given careful examination. As you look to incorporate greater levels of location intelligence into your business, look beyond the obvious benefit of GPS tracking to find other ways your company can save money.

Custom Reporting Tools You Need to Make Better Decisions

Custom Reporting Tools You Need to Make Better Decisions

Tools to Make Better Decisions – Faster & More Efficient

Fleetistics is always looking to provide our customers with tools to enable the highest ROI possible. We have been hard at work developing a set of custom reports designed to give fleet managers access to information quickly. Some GPS tracking systems, like the GO System will provide you all the available fault codes and status codes, which equates to hundreds of variables, instead of just a few basic variables.  

In MyFleetistics click Analytics > Custom Reports in the main menu to see the growing library of dashboards and reports that are just a couple mouse clicks away

The Safety and Exceptions Dashboards provide valuable information that can keep you well informed on your fleet in a matter of seconds.

Custom Reporting Safety Exemptions

Custom Reporting from Odometer and Voltage Reports are invaluable to monitoring your fleet. Odometer reports provide vital statistics on miles driven, which can be beneficial in billing customers or paying drivers. Voltage Reports provide an opportunity to preemptively maintain batteries to avoid expensive towing and lost wages for your fleet vehicles.

Simply click the menu option for Go Odometer or Go Voltage and the information is instantly available for you to review and synthesize.

Custom Reports

At Fleetistics we strive to be your partner in fleet management. GPS data allows us to create reports, dashboards, view trends and statistics that can help you understand yesterday, and better prepare you for today and tomorrow. We are always working to improve the way we deliver data. We welcome all criticism and comments to better our systems for our valued customers. Our goal is to give the most complete set of tools to enable best-in-class fleets across the nation.

Custom Reporting
Return on Investment Series: Proactively Manage Driver Behavior

Return on Investment Series: Proactively Manage Driver Behavior

Proactively Manage Driver Behavior & Conclusion

Proactively Manage Drivers Behavior

The Fleet Savings Summary Report highlights your fleets top five most valuable driver coaching opportunities by vehicle. These drivers can be interpreted as the fleets most costly drivers of spending, and therefore represent the best bang for your buck driver coaching opportunities. Driver behavior can be critical to the operations of your vehicles.

Proactive management is key. Aberdeen Group reports that top performing organizations are 96% more likely than their peers to utilize technology that alerts management, and the driver, of exceptions being made (i.e., speeding, harsh cornering, etc).

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Conclusion

Todays fleet managers are under extreme pressure to manage their fleet costs despite deteriorating economic conditions. These costs include the procurement and disposal of the vehicles, fixed and variable operating costs, labor costs, as well as collision and insurance claims.

Using telematics data, fleet managers can discover new cost savings opportunities across their entire fleet. By pursuing these savings opportunities, a fleet manager can reduce their COI, improve their fleets operating efficiency, and grow their bottom line. Conversely, managing a fleet without a telematics platform is likely to result in higher costs and poor visibility for improvement.

Telematics and the Fleet Savings Summary are valuable tools that fleet managers should use to better understand and proactively manage their vehicles and drivers, and ultimately run a more profitable fleet.

Click here to request more information.

 

 

 

 

 

Return on Investment Series: Identify Key Opportunities for Cost Savings

Return on Investment Series: Identify Key Opportunities for Cost Savings

Identify Key Opportunities for Cost Savings

In this fourth part of our ROI/COI blog, we will discuss specific telematics related cost savings categories that compile our Fleet Savings Summary Report.

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#1 – Safety: Reducing costly vehicle collisions

The U.S. Occupational Health & Safety Administration (OSHA) reports the following figures:

Cost Savings

Collisions, speeding, and aggressive driving behaviors were found to be a contributing factor in 31% of all fatal crashes, while seat belt use was found to decrease the risk of a fatality by between 45-60%. With this knowledge and the use of our telematics program, fleet managers can improve profitability by monitoring driver behaviors and proactively coaching drivers.

Other in-cab driver feedback tools such as GO TALK and real-time audible alerts can drastically reduce the likelihood of an on-duty accident. This can also be quantified in a reduction to insurance costs. To quantify these savings, the Fleet Savings Summary Report uses a proprietary safety-scoring algorithm to determine the existing and potential savings for a fleet.

#2 – Fuel: Controlling Runaway Fuel Cost Savings

Managing fuel costs can be complicated and involve a number of variable, including fluctuating gas prices and inconsistent driver behavior. For many fleets, fuel is one for the largest expenses.

Fact: The U.S. Department of Energy reports that rapid acceleration and heavy braking can reduce fuel economy by up to 33% for highway driving and 5% on city roads. Idling and speeding can also have drastic impacts on MPG.

Market research has shown that the effective use of telematics has an effect on fuel cost savings by as much as 14%. Driver coaching is instrumental in achieving these cost reductions. For every 5 mph over 50 mph, a driver can reduce their MPG by approximately 7-14%. Therefore, getting drivers to slow down and observe the speed limit translates into saved money.

The Fleet Savings Summary Reports uses a proprietary fuel-scoring algorithm to determine a fleet’s existing and potential fuel-related savings. In doing so, driver speeding incidents and idle time were found to be the largest contributor to fuel waste, which resulted in fuel-related savings.

#3 – Maintenance: Reducing Planned and Unplanned Repair and Maintenance

We all know that preventative maintenance is a regular part of owning a vehicle, but additional repairs due to aggressive driving and vehicle misuses are an unnecessary cost to a fleet. Particularly, harsh accelerations, harsh cornering, and harsh braking cause harmful wear and tear on critical vehicle components. This drastically increases a vehicle’s variable CpM.

The results materialize as reduced tire life, reduced brake life, more frequent scheduled maintenance and more frequent non- scheduled maintenance and repair. In fact, these non-scheduled maintenance interruptions can result in lost profits of between $400 to $700 per day, in addition to the cost of repairs.

The Organization for Economic Co-operation and Development (OECD) reports that telematics technology can help a company reduce maintenance and repair cost by as much as 14%. Because much of these savings are tied to driver behavior, using real-time driver management tools and in-cab alerts are the best way to minimize unnecessary wear and tear on your fleet’s vehicles.

By managing the aggressive driving behaviors, fleet managers can minimize their maintenance repair costs, in in turn generate savings reflected in the Fleet Savings Summary Report in the Maintenance section

#4 – Productivity: Increasing Work Efficiency

Driver compensation is often a large portion of a fleet’s operating budget. That being said, labor can be very expensive for fleet managers. Among the many ways to calculate labor productivity, vehicle idle time is an important metric. Even though idle time only captures a component of employee productivity, it is the only metric that the Fleet Savings Summary Report utilizes for its productivity-based scoring algorithm at this time.

Market research suggests that telematics can increase workforce productivity and reduce labor costs by up to 12%.14 This allows companies to make more customer stops and cut out unproductive mileage. The net effect is higher revenues and lower costs.

Using the Fleet Savings Summary Report’s proprietary productivity-based scoring algorithm, this increase in workforce productivity translates into productivity-related saving. To maximize these savings, fleet managers must limit their fleet’s idle labor, which is approximated using vehicle idle hours per trip.

I know we said this was going to be a 4-part series but there is so much great information to offer that we have added a 5th part. In the next series we will discuss how to proactively manage driver behavior. Putting all these steps into place to maximize your ROI and decrease your COI!

Click here to request more information.

Return on Investment Series: Fleet Savings Summary

Return on Investment Series: Fleet Savings Summary

What is the Fleet Savings Summary Report?

The Fleet Savings Summary Report is a snapshot of existing versus potential savings for your fleet. These savings were determined through the use of proprietary driver scoring algorithms.

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Fleet Savings Summary

Report Overview

To calculate a fleet’s existing and potential telematics-related savings, a detailed breakdown of its operating costs are required. Geotab conducted a combination of primary and secondary North American market research to develop fleet-specific Cost-per-Mile (CpM) models, including sub-models for fixed vehicle related costs, variable vehicle related costs, and driver salary related costs. There are two major factors that impact the nature of fleet costs, vehicle class & vehicle mileage.

  • Fleet Savings ReportVehicle Class – The vehicle makeup of a fleet has a big impact on its operating costs. For example, Heavy-Duty (HD) trucks have a very different CpM breakdown than Medium-Duty (MD) and Light-Duty (LD) vehicles. The Fleet Savings Summary Report segregates CpM data into three classifications: HD, MD & LD.
  • Vehicle Mileage – Just as vehicle class impacts CpM, vehicle mileage can have a large impact as well. This is true for two reasons:
    • Fixed vehicle and driver costs will be spread over less total miles.
    • Vehicles that drive fewer miles will likely spend a larger portion of their driving time on city roads rather than highways or freeways, which can increase the vehicle’s variable CpM.

In order to determine a fleet’s average mileage, the Fleet Savings Summary Report automatically calculates an average monthly mileage for the entire fleet, and multiplies it by 12 to get the estimated annual value.

In the next series we will discuss how we identify key opportunities for cost-savings.

Click here to request more information.

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