Complete Guide to Fleet Management

Fleet management is the process of managing a company's vehicles and assets, from acquisition to disposal. The goal is to improve operational efficiency, reduce costs, and increase performance. 

Fleet management can involve the use of software, GPS tracking systems, and telematics to provide real-time insights. Fleet management can help companies achieve their environmental, social, and governance (ESG) goals by tracking fuel consumption and other diagnostic data.

What is Fleet Management?

Fleet management is how a business or organisation keeps its vehicle fleet running healthily. Of course, this is a general statement and comprises a host of managerial activities. However, all areas of fleet management have 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. 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 does Fleet Management Involve?

1. Fuel Management

Fuel management involves overseeing and optimising all fuel-related processes within a company’s vehicle fleet. This includes tracking fuel consumption, implementing strategies to minimise usage, and improving overall efficiency. The primary objectives are to reduce fuel costs, lower environmental impact, and enhance operational performance by ensuring fuel is used as effectively as possible.

2. Vehicle Acquisition

Vehicle acquisition in fleet management means finding and adding the right vehicles to meet a company's operational needs. This process includes identifying the business’s current and future vehicle requirements, selecting suitable options by evaluating factors such as fuel efficiency, tax implications, insurance costs, employee needs, and resale value. Once the ideal vehicles are identified, they are procured through purchasing, leasing, or hiring, depending on what best aligns with the company’s budget and long-term strategy.

3. Vehicle Maintenance

Fleet vehicle maintenance refers to planning, scheduling, and executing maintenance activities to ensure the fleet remains in optimal condition. This includes both routine servicing and addressing unexpected repairs to minimise downtime. The primary aim is to maintain vehicle reliability, extend their lifespan, and make sure they are always safe and ready for use.

4. Vehicle Tracking

Fleet vehicle tracking leverages GPS technology to monitor the real-time location and status of a company’s vehicles. This system enhances operational efficiency by enabling better route planning, improving driver accountability, reducing fuel consumption, and providing insights for maintenance scheduling. It also improves customer service by ensuring accurate delivery updates and quicker response times.

5. Compliance

Fleet compliance implies guaranteeing that a company’s vehicles and operations adhere to legal requirements, industry regulations, and established best practices. This includes meeting standards for vehicle inspections, driver qualifications, licensing, and environmental policies. Compliance is crucial not only for avoiding legal penalties but also for safeguarding driver safety, maintaining public trust, and protecting the business’s reputation.

6. Logistics Planning

Logistics planning in the context of fleet management focuses on optimising the movement of goods, services, or personnel to ensure timely and cost-effective operations. This involves designing efficient delivery routes, coordinating schedules, managing load capacities, and anticipating potential delays. Effective logistics planning helps reduce costs, improve delivery times, and maximise overall fleet productivity, while also enhancing customer satisfaction.

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 - An 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 - Fleet driver safety focuses on ensuring the well-being of drivers by promoting safe driving practices and minimising risks on the road. This involves implementing driver training programmes, certifying the roadworthiness of every vehicle via routine checks, monitoring behaviour through dash cams, and enforcing compliance with safety regulations. By prioritising driver safety, businesses can reduce incidents, lower insurance costs, and foster a culture of responsibility and accountability within their fleet operations.
  
  
• 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 that 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 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 the data that has been produced, determine its relevance, and then use that data effectively. This primarily consists in addressing how certain underperforming areas can be improved upon in terms of efficiency and productivity. The ultimate aim is 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 can solve.

How does a Fleet Management System Work?

A fleet management system works 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 presented for analytical purposes. For added specificity, fleet management systems will also equip vehicles with mounted dash cams for hazard detection and collision prevention.

Fleet management systems provide enhanced visibility; 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: Fleet Management Technology

Fleet management can be significantly improved with the use of several key technologies:

• Fleet Management Software: Centralises vehicle data and streamlines tasks such as maintenance scheduling, compliance monitoring, cost tracking, and reporting. It helps fleet managers manage operations efficiently and handle large volumes of data with ease.
  
  
• Telematics: Integrates real-time vehicle diagnostics, driver behaviour monitoring, and performance analytics. Telematics devices provide insights to reduce fuel consumption, improve driver safety, and optimise vehicle usage, making it a crucial component of fleet management.
  
  
• GPS Tracking Systems: Monitors the real-time location of vehicles to improve route planning, enhance delivery accuracy, and reduce downtime. GPS tracking also ensures better accountability and helps respond quickly to operational challenges.

The most effective fleet management solutions combine all the above technologies, providing real-time data on every critical aspect such as vehicle location, performance, and driver behaviour. This comprehensive approach delivers a tailored, all-in-one solution rather than relying on fragmented, standalone applications.

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.