18 EFFECTIVE FLEET MANAGEMENT TIPS THAT LEAD TO SUCCESS
Most small businesses that deal in products delivery via fleet management know one fact.
That fact is – relying on others can be a burden.
Asides the risk attached; it doesn’t fill you with confidence to have a part of your business outsourced to another company.
Another downside – finding a suitable partner itself is very time consuming and stressful.
The main area for visceral improvement is how small businesses can deliver their own products to their customers independently.
Any company that has a lot of customers would have to make a good decision to deliver their goods, and if options are not considered well enough, the company might go down the drain or run into a loss.
On the surface, it sounds simple. But the whole idea of actually delivering products to the customers’ front door, no matter where they are, is incredibly complex.
This is the area that is deemed to be handled by logistics, and out of all the departments and zones of small businesses, it’s the least covered and understood.
That’s why many businesses go for the option of drop shipping. With drop shipping, they don’t store their own products. They just have another storage or delivery company do the work for them.
But if you just focus on building a small fleet of delivery vehicles you could also become independent if you make the best use of this fleet management tips.
You would need to make several decisions from saving cost, curbing mismanagement to maximizing profits to achieve the objectives of your firm.
How then can your fleet be sustained over a long period of time?
Well, look no further, this article aims at examining effective management tips for your fleet, which will lead to success.
1. Consider The Structure Of Your Target Cities
Where you’re delivering your products matter a lot for your delivery capabilities.
For example, if you’re situated in the middle of a region you will more than likely want to deliver to the nearest large cities and large towns.
That’s pure common sense if you ever plan on expanding and growing outside of your immediate base.
Therefore, you need to know the distance that the average truck journey might be.
The economy of the engine is going to allow you to keep costs down.
That should be your main driving factor when it comes to deciding what kind of truck model you actually want to buy and make your official fleet.
What kinds of roads will they be driving through up to and inside the cities and towns? If you’re in the countryside then a narrow truck model is best, but this also limits your capacity.
Judging by what kind of logistical challenges the cities and towns you intend on delivering pose, you should shape your decision for the delivery vehicles to accommodate them.
The model you choose is important for the roads, cities, and towns you will be delivering to. Hence, you need to pick your fleet model carefully.
2. Have Your Fleet Requirements Correctly Calculated
The decision of how many vehicles to get can be a tricky one. It can also be stressful and costly if you do not correctly dimension the fleet appropriately.
Getting more than the required vehicles for your operations will lead to under-utilization of your resources. Vehicles will be left to stay idle and this will lead to depreciation of the vehicles.
Also, if the vehicle was leased, you will still have to pay your Leasor whether the vehicle was used or not. Peradventure you bought less than the required number of vehicles for your services, there you won’t be able to maximize your profits.
Therefore, proper planning on the number of vehicles to be purchased must be put into consideration.
3. Lease or Buy
This should be the first line of action in fleet management. You need to make a choice to buy, rent or loan vehicles, and your choice depends on the startup capital you have at hand.
If that is settled, you can decide on what management skill to put in place in maintaining and ensuring a sustainable fleet company.
However, people often believe that it is better to lease vehicles rather than getting vehicles outrightly. This will give you ample time to get an experience of the kind of vehicles you will eventually go for and might also save you some money and kick off time.
4. Choose Some Fuel-efficient Vehicles
When running a fleet business, fuel usage may take up most of the running costs. Hence, it is advisable to choose vehicles that efficiently use fuel.
For example, if your vehicle consumes 9 litres of fuel per 100 km and runs an average of 4000 km per month, the amount of fuel that will be consumed per month will be 360 litres.
If you have to calculate that for the whole year or life cycle of the lease agreement, that’s a lot and you might lose out if you’re not prepared for such investment. Therefore, it is necessary to make your fuel consumption statistics from the onset.
It is also important to allocate resources appropriately where applicable.
Different vehicles have different operations, fuel consumption and general efficiency. Hence, the resources available must be allocated according to the efficiency of the vehicle.
For instance, the rate at which a small vehicle will consume fuel is different from the way a bigger vehicle will do. It will be irrational to allocate the same resources for the small and big vehicle. There is an essential need to allocate resources based on the efficiency of each vehicle.
5. Buy The Right Equipment
After making the decision on whether to buy, lease or rent your fuel-efficient vehicle, the next thing to do is to get the right tools that will help in maintaining and servicing the vehicles.
It is important that a fleet manager takes out time to spec out vehicle options so that they meet the standards of your fleet before purchasing them.
There is an approach that could be useful in purchasing the right equipment that wouldn’t become a liability or loss to the company in the long run. The approach is the ‘try-before-you-buy’ program by Manager Hayes Brianne of Sarasota County.
He modelled this program to make a review based on some considerations and the financial capability of the company. Here are things to consider when choosing some equipment – A warranty, personnel training for preventive maintenance, availability and costs of the parts, emissions, the integrity of the structure, and manufacturer customer support.
All the abovementioned reviews will help you to decide if the equipment is worth getting or not.
6. Check Out for Fleet Management Compliance
Another important factor to consider in fleet management is checking out the fleet management compliance and sticking to it. Some fleet managers think they can manoeuvre their way of running a fleet company without acquiring the necessary pass for operation.
You may pay dearly for breaking rules sooner or later and you will likely spend more than you should have if you had acquired the pass from the onset.
It is also important to make the drivers aware of the fleet management compliance and Pass for operation and stating it clearly to them. Else, you might end up paying fines that might be issued against your company. You don’t want to deal with such a loss.
7. Extend Your Fleet Cycles
This will be useful if you have decided to lease your fleet of vehicles. This choice will help you to save up from the monthly costs. The savings can be made by extending your lease cycle.
How? The monthly payments you pay to the leasing company will reduce if the lease agreement is for four or five years than when it’s for just two or three years.
Another benefit of extending the lease agreement is that the performance of your vehicles will not be affected if well maintained. Such savings can be used to cover up for any increased cost in maintenance of the vehicles.
8. Inspect Your Trucks Regularly
Just like any airliner that lifts off to deliver cargo abroad, you will need to inspect the trucks daily. Before the trucks can even set off, a general check by the delivery manager needs to be done. The trucks should all be parked in a line and waiting to be given the go ahead. Always have a pile of tyres ready in case of flats and general wear and tear of the rubber.
Make sure you have Gas Oil drums that are filled with fuel and ready to be used by the trucks so time isn’t wasted at filling stations. You can choose between 200L and 20L drums. They can also provide you with a next day delivery whenever you’re running short or when your fleet expands.
Asides that, you should have an implementation and maintenance policy so that your company ‘s assets and vehicles will be protected from the negligence of duty. This inspection must also be communicated to the employees to ensure a unified responsibility of maintenance of assets, vehicles and equipment.
9. Monitor Costs Regularly
Fuel costs, services costs, and all the costs associated with running a fleet can accumulate aggressively and if you are not careful to structure your cost records, there could be a record of untraceable loss soon.
If costs of operation are not monitored and regulated consistently, the money that has been saved up in one area of the management will be used up in another area.
Hence, you must be ready to monitor the cost of running each vehicle and then try to figure out how to minimize your running cost.
10. Purchase The Best Software Available
Having to balance fleet costs manually on spreadsheets can be very challenging. With the advancement of technology, data analysis has now become an important factor in carrying out bulky calculations.
Therefore, fleet management will be more effective and easy if the software that manages fleet policy, costs and compliance are purchased.
This will save you time and money in managing your fleets. There is a lot of software that can keep records of the fuel usage, the mileage of vehicles and other important indicators.
11. Use Telematics
Telematics and vehicle tracking are usually a very good addition to the Fleet Manager’s range of tools. It would help you to monitor the movement of the vehicles and to identify other problems while in transit.
It is very necessary if you want to avoid unforeseen problems that can affect your company’s reliability and reputation. Telematics will also help you to monitor the behaviour of your driver while working.
You can also take advantage of cloud-based fleet management which stores and access data quickly using cloud-based software. This is easier, in that, route planning, fuel card logs and tyre purchase log will be kept in a database and can be monitored from time to time.
The cloud-based software will also help monitor and minimize fuel use costs, the driver’s behaviour, and distance covered by vehicles from the office.
12. Prepare For The Unexpected
Having so many tasks to handle on a daily basis might push your body to request for a break. When you, as a fleet manager, are stressed or engaged with an unexpected event, you might have to outsource some of the skills tasks needed to be done to other companies who can solely handle it and effectively.
You need to plan for this from the onset through simple and practical approaches. Don’t wait until you are totally unavailable before you plan to find alternatives.
13. Use Company’s Vehicles During Work Hours
When assignments are to be carried out by employees, it is best to use the company’s vehicle rather than personal vehicles or public transport.
This is because the cost of transport has been included in the running of the company’s vehicle per day or per week. You would save extra cost by using the resources you already have instead of having to get the estimate of the fare that will be needed to run the errand.
In most cases, the cost of not using the company’s vehicle (idleness) is always way higher than having to reimburse the employee for using vehicles not belonging to the company.
14. Identify opportunities to reduce mileage
Vehicles can be used in a non-optimal way if it is used without a good plan. A vehicle may make a trip three to four times a day instead of making all the trips at once by connecting one to another until it gets to the final destination, especially if they are on the same route.
A vehicle tracking and planning software can be used to planning the movement of the vehicles. Making so many trips will wear out the vehicles and cause them to deteriorate faster and develop faults easily. You can avoid all of that by proper route planning.
15. Encourage good driver behaviour
Encouraging and educating your drivers on behaviours expected of them when handling both the vehicles and deliverables is important. If you get good vehicles and your drivers mishandle them, the same cost that has been saved will be used to repair the vehicles when they develop a fault.
Therefore, it is necessary that your drivers are made to understand the cost of fuel, gas emissions, maintenance and the risk of accident which can endanger lives and total damage to the vehicle. This kind of training should be done continuously to prevent the mismanagement of the vehicles. Most times, these pieces of training are not expensive and sometimes free. This will also help the drivers know what to do when a repair is needed on the vehicles or when involved in an emergency or accident.
16. Ensure Employee Satisfaction
When a company moves progressively fast, it implies that the employees are happy with their jobs. For a fleet company to be successful, its employers must be treated well and allowed to make suggestions and contributions from time to time. This is so essential because they are in direct contact with the vehicles and they know the challenges faced during operations. Hence, ensure you make your employees happy and satisfied. The employees should also be allowed to take some days off or a kind of vacation.
17. Ensure Customer Satisfaction
A fleet that is in the business of delivery will always deal with people and customers are the most important contributor to the company’s success. They need to be kept happy. With the use of telematics and vehicle tracker, customers can be kept abreast of the movement of their goods, especially when there are delays or timely deliveries. It gives the customer assurance that their requests are already being processed.
18. Be Safety-conscious
As a result of the capital that has been put into fleet management, you might be tempted to focus on getting returns as soon as possible. If the focus of a fleet company is just on the profit, a lot of things and people will be endangered. The employees, the vehicles and the equipment will be over-utilized and breakdown will be frequent.
However, if safety is the focus, there will be necessary measures put in place that will prevent accidents and the profits made will be saved for other useful things. Rather than having to repair vehicles within a short time, pay fines, or having to get another vehicle, a focus on safety will curb those issues and the employees, vehicles, environment and the general people at large will be in good shape.
The Bottom Line
Summarily, fleet management is very possible and easy if all the necessary requirements such as understanding and keeping to the vehicle policies and compliance are met.
The important measures such as vehicles technology and tracking software should be put in place to avoid waste, overuse of resources, mismanagement, loss of data, late delivery to customers and general loss of the business.
If the above-stated fleet management tips are put in place, your fleet will expand, record good profits, minimize cost and achieve success in a short time.
Besides, delivery companies are juggling different clients all the time. So, if you want more control and you want to focus on your needs, you’ve got to start building your own delivery fleet.
Which fleet management tip has helped you? 😀