Complete Guide to Fleet Management

Vehicle fleets make up a big part of the transport and logistics industry. Whether it’s a matter of simply delivering goods to customers or otherwise, large-scale organisations and smaller businesses alike need vehicle fleets to fulfil their core day-to-day operations. The effectiveness of having multiple cars, vans, trucks, HGVs, or buses to simultaneously carry out jobs is unquestionable, and is precisely the reason why we see such a widespread use of commercial vehicle fleets today. 

Indeed, this current level of usage has directly led to a necessary trend known as fleet electrification. Namely, a push towards the adoption of electric vehicles (EVs) in order to reduce the amount of CO2 emissions that fleets of vehicles are collectively responsible for.

Yet still, regardless of if a business functions with a greener fleet or not, there are fundamental aspects of the sector which ultimately require a defined approach to handling these entities due to their inherent complexity. This is what’s referred to as fleet management, and it is how an organisation ensures a fleet’s prosperity and longevity. So that you can get to grips with the field, we’ve put together this complete guide to fleet management which goes over all the topic’s important details.

What is Fleet Management?

Principally, fleet management is how a business or organisation keeps their vehicle fleet running healthily, both presently and prospectively. Of course, this is a general statement and comprises a host of managerial activities. However, all facets of fleet management house the shared aim of controlling the entire life cycle of an organisation's fleet of vehicles. 

This not only implies the upkeep of each individual vehicle’s physical condition, but also means measuring and maximising the performance of these vehicles when they are on the road. Significantly, fleet management isn’t usually enacted by a team, it is rather arranged by a single person known as the fleet manager. As such, fleet managers occupy a central role that accounts for an all-encompassing variety of tasks, those which concern internal as well as external factors. 

Why is Fleet Management Important?

Foremostly, fleet management is important because it has the potential to increase the overall operational efficiency of a vehicle fleet. Fleet managers use the term efficiency because it intrinsically regards a wide array of elements. 

As we mentioned, fleet managers must effectively handle issues that are posed inside the fleet itself, in addition to those that come from the outside. Followingly, there are a number of tasks that are assigned to fleet managers, and these are what categorically threaten the degree of a fleet’s efficiency if done poorly.

What do Fleet Managers do? - The Role of the Fleet Manager

Fleet managers oversee both wider strategic movements and typical day-to-day operations, including:

1. Fuel Management

With the exception of electric fleets, fuel has always been one of the major expenses associated with vehicle fleets, with it covering 25% of the average fleet’s expenditure. Reason being, that it is just so expensive.

Evidently, there are market price fluctuations that are out of the hands of fleet managers, i.e, oil prices. Although, lowering a fleet’s fuel consumption works to respond to this and there are many ways for fleet managers to make their fuel more cost-effective, provided they have the right advice.

2. Vehicle Acquisition

Obtaining the vehicles that a given fleet consists of is a burdensome responsibility in itself for fleet managers. This is because choosing wrongly can, again, lead to financial losses.

It’s understandably difficult. There is such an assortment of vehicles on the market, and so much to influence one’s leasing or financing decision like tax, insurance costs, and potential resale value. The onus to deem what types of vehicles are suitable, make appropriate selections, and negotiate deals with car manufacturers falls onto a fleet manager’s budget allocation abilities.

3. Vehicle Maintenance

After acquiring vehicles, it’s essential that they are kept in a condition suited for on-road use. This means having a vehicle maintenance plan in place. 

Over time, it’s inevitable that fleet vehicles will experience physical wear and tear, defects, and component failures. Therefore, fleet managers are required to make sure that each and every vehicle is inspected before purchase, regularly checked afterwards, and repaired according to reports.

4. Vehicle Tracking

If a fleet manager cannot consistently and accurately locate their fleet vehicles’ positions, then this inadvertently causes a lot of issues to arise. This owes to how an absence of real-time vehicle tracking brings about driver detouring, which consequently leads to rifts in both safety and efficiency. For instance, it will imply a higher rate of fuel consumption and make it so that if a driver experienced an on-road incident, it would take more time to provide a response.

Additionally, fleet managers without asset tracking can’t send delivery updates and ETAs to clients, nor generate mileage logbooks detailing route history to discern optimal journeys that take traffic disruption into account. Whether a fleet is small or large, vehicle tracking is one of the big challenges for fleet managers, and this is why they resort to GPS navigation technology for improved visibility.

5. Compliance

Alongside parts of fleet management that are considered best practice to satisfy, there are those which fleet managers are legally obligated to address. Specifically, there are certain on-road standards that all fleets must comply with. 

Meeting regulatory compliance requirements involves performing aforementioned vehicle checks on a regular basis, directing driver hours, verifying comprehensive technical scrutiny, guaranteeing that insurance is valid, keeping up-to-date on legislation, and organising corresponding documentation. 

Compliance is vital particularly in the event of an incident so that an accurate audit can be facilitated if there is a subsequent complaint or investigation. If a fleet manager fails to maintain their fleet's compliance, then this can result in hefty fines, claims, and reputational damage that is hard to recover from.

What are the Benefits of Fleet Management?

As illustrated, fleet managers take on a considerable amount of responsibility. Add to this, the fact that the separate duties must be solved concurrently, it soon becomes apparent that cohesive fleet management is a necessity, as opposed to an option. Fleet management done right is when its goal is to lessen the strain on managers, while adhering to the demands of the industry in order to make a fleet operate more smoothly. The advantages of fleet management can be summed up as follows:

• Total Cost Reduction - A economical change in the total cost of ownership (TCO) of a fleet is one of the most attractive benefits of good fleet management, and reducing fleet costs occurs from multiple channels. Firstly, more efficient route planning will mean a fleet saves on fuel costs; acquiring vehicles at the most competitive rates entitles a fleet to long-term monetary savings, ensuring compliance equates to not being issued financial penalties, and regular maintenance prevents faults from worsening in addition to delaying depreciation.
  
  
• Driver Safety - An integral duty of all fleet managers is securing the safety of their drivers. Sound fleet management supports this assignment by certifying the roadworthiness of every vehicle via routine checks and dynamically scheduling following servicing. Moreover, a cogent fleet management strategy will aid their drivers’ behaviour by providing driver training to reduce risk, as well as instruct them on how to respond to accidents properly.
  
  
• Productivity - As a rule, a fleet cannot be efficient if it is not productive. Fleet productivity denotes a measurement of employee work output against the resources expended. In essence, the former figure has to outweigh the latter for successes and areas of improvement to be pinpointed. The primary way fleet managers do this is by generating actionable insights from key performance indicator (KPI) analysis. Albeit, this is only possible by collating pertinent data.
  
  
• Driver Retention - In a climate of driver shortages, hiring new drivers and keeping hold of a fleet’s existing employees is paramount. Solid fleet management achieves driver retention due to how it establishes a firm sense of trust between a manager and their drivers. This trust develops from the promotion of safety and clear communication, attributes which foster a happier mobile workforce by way of improved workplace conditions.
  
  
• Customer Service - An increase in the quality of customer service is a natural consequence of optimising a fleet’s internal operations. Fleet management isn’t just about saving money. After all, fleets generally rely on their provision of deliveries. If these deliveries are faster, more reliable, and eco-friendlier, then customers will appreciate a fleet’s values and maintain their relationship with its manager. In this way, a fleet manager which exhibits high standards of service possesses benefits that stretch beyond the fleet itself.

What is a Fleet Management System?

A fleet management system is essentially a specialised technological database that fleet managers use in order to carry out their individual day-to-day jobs which relate to a business’s vehicles and its employees. What makes these systems so specialised is that they have numerous applications, all of which involve handling a wide range of information and data.

This is of singular significance because fleets, both small and large, generate a great deal of data, even during just one operation. Consequently, the fleet manager must sort through what has been produced, determine its relevance, and then use it effectively. This primarily consists in addressing how certain underperforming areas can potentially be improved upon in terms of efficiency and productivity. The ultimate aim being, to reduce overall operating costs while minimising CO2 emissions.

Typically, the vital necessity of achieving such fleet optimisation through these methods has been incorporated within the various other administrative duties. As such, fleet managers were generally expected to accomplish this degree of organisation manually. Naturally, this led fleet management to be categorised as substantially time-consuming. Moreover, there are also those adverse external factors to consider. For instance, downtime resulting from traffic jams, alongside on-road accidents & fuel wastage caused by poor driver behaviour. All of these obstacles to proper fleet optimisation are what sophisticated fleet management systems offer utilisation for to remedy.

How does a Fleet Management System Work?

A fleet management system works, fundamentally, via an interface between devices that are installed onto each vehicle within a fleet, in addition to a piece of software that houses an online dashboard.

The most common hardware is that which reads a vehicle’s on-board diagnostics. From there, these devices collect and monitor an array of technical information such as distance driven, idle time, safety metrics and seat belt usage, as well as facets relating to acceleration frequency, brake performance, tyre pressure, vehicle condition, and rate of fuel consumption. Importantly, these devices are equipped with GPS receivers to enable real-time vehicle location tracking too. This data is then processed into a comprehensible format before being transferred to the database by way of a wireless cellular or satellite network, where it is stored and displayed for analytical purposes. For added specificity, fleet management systems will also equip vehicles with mounted dash cams for hazard detection and collision prevention.

What fleet management systems principally provide, as the above denotes, is visibility. I.e., where a fleet’s vehicles are currently located, how their individual drivers are behaving on the road, and the condition of each vehicle being used. With this level of monitoring, a fleet manager can discern the most efficient routes, when vehicle maintenance & repair is required, ensure regulatory & legal compliance, and make accident & risk assessments. For this latter point, in-cab feedback devices are particularly useful for real-time driver correction.

The crux is that the database can automate appropriate responses when instances, like those listed above, are detected. For example, if a vehicle was in need of maintenance or repair, then this can be accordingly scheduled. Likewise, if a driver was exhibiting behaviour which either wasted fuel or is deemed to be dangerous, as typified by frequent over-acceleration and excessive detouring, necessary communication is immediately forwarded. The same goes for allocating time to routine inspections, vehicle acquisition & dispatching, and the creation of reports for both retrospective & prospective actionable insights.

What are the Benefits of a Fleet Management System?

One of the main benefits that the implementation of a fleet management system affords is saved time. As is evident from what we’ve discussed so far, the sheer amount of administrative responsibility that fleet managers are obligated to fulfil is exceptionally demanding. By having a set of tools in place which automate mundane office-based tasks, this thereby gives fleet managers a newfound freedom to dedicate their time to a more hands-on approach to responsive management.

Furthermore, the mental fatigue that arises from being overloaded with administration should not be understated. This is because it is a regular cause of oversights, whether in regard to filing an abundance of paperwork, needing to contact multiple drivers for status updates, or documenting detailed operations. The fact that this can all be automated not only means that fleet management becomes streamlined, but also more accurate.

For this reason, lowering the burden of the fleet manager equates to improvements in efficiency, productivity, safety - since compliance is a guarantee - and sustainability, as a result of lowered fuel usage. What’s more, cost reduction is intrinsic within all of these affected aspects.

How to Improve Fleet Management with Fleet Management Software

The use of fleet management software helps improve fleet management substantially. However, there is an intimidating collection of fleet management software out there, obviously making it tricky to choose the best package for your fleet. Though, not all fleet management software is designed similarly. 

If a fleet manager is to successfully maintain their vehicles, control operating costs, secure driver safety, ensure regulatory compliance, and increase productivity levels, all while avoiding being overwhelmed by the vast quantity of fleet data, then they require software that streamlines the entire process. Decisively, this can only be attained if the software in question forms a tailored fleet management solution, instead of it being a standalone application.

The Benefits of Fleet Management Solutions

We at MICHELIN Connected Fleet promise fleet managers who implement our fleet management solutions and services a truly bespoke experience. We take a hands-on approach when it comes to optimising fleets for efficiency by looking at your organisation’s distinct KPIs. Further still, our solutions utilise cutting-edge geolocation technology so that you can actively improve the overall efficiency of your fleet, as well as immediate in-cab feedback devices so that you can rest assured concerning the safety of your drivers and the assets they’re transporting.

Our fleet management solutions couldn’t be easier to install and use, and our digital dashboard can be integrated with already-existing systems while offering automation for administrative tasks so that there is no disruption to your current workflow. In effect, fleet-wide cost and time savings are seamlessly added.

MICHELIN Connected Fleet’s vision is to increase the longevity of the transportation industry as a whole by embedding sustainable fleet management practices multinationally. If you share this sentiment, and wish to realise it by optimising the efficiency of your fleet, then be sure to contact us today for details on how we can help. For further reading material, feel free to browse through our resources center.