Monthly Archives: June 2010
In this article we look at how historical GPS Tracking data can be used to reduce costs and improve employee productivity for a fleet owner.
Which is more critical when considering your fleet’s fuel cost – the price of gas or the importance of each trip? Have you ever noticed that although your employees are clearly busy, they are not getting enough done to generate a profit margin for your business? One goal of installing a GPS tracking system is to monitor and reduce excess mileage by your fleet. However, the real concern shouldn’t be reducing mileage alone or improving trip efficiency, but rather creating a system that evaluates both metrics and allows you to optimize the quality of each stop in a way that creates an efficient utilization of your mobile assets.
Measuring Trip Costs
Let’s take the simple example of a vehicle with a 70 mile route- 35 miles out, 35 miles back-to make a delivery worth $100 with a $20 profit margin on the delivery. A fairly standard average for the fleet cost to deliver any product or service is $0.48 per mile, so this trip has a net loss of at least $13.
Now, obviously in this sort of scenario it is easy to see the problem. The company has just paid the customer $13 to deliver their product to them, but if you do not have a tool to look at your trip costs, how do you identify and fix even the simplest of cost creating problems?
Measuring Mileage per Customer Stop
To get a little more complex, let’s examine a field service organization that has several regional offices. Each office has an average of 12 vehicles. The company decides to install GPS tracking devices in each vehicle to measure daily activity such as the number of stops, the duration of and distance between stops, the total mileage, and start and arrival times.
Before installing GPS trackers, the company’s vehicle logs showed that each vehicle travelled approximately 850 miles each week and made 17 customer stops. With an operational cost of $0.48/mile, the fleet manager knew that each stop was costing his company $24, but without the ability to generate any detail on each vehicle’s weekly activity, it was practically impossible to find the savings opportunities. Once the units were installed, it became obvious that several trips that could be rescheduled or reassigned, allowing more trips to be completed by each rep. After a few adjustments the company saw its average vehicle mileage rise to 912 miles each week, but the number of stops also increased to 21 customers. The final result for this business was a reduction in the cost per stop from $24 to $21, or a 12.5% increase in overall fleet efficiency.
GPS Tracking is Now a Crucial Part of Fleet Management
The tools that are made available to the Fleet Manager from a full service GPS Tracking utility like our SageFleet monitoring system have become a critical component of every fleet manager’s cost containment and efficiency improvement strategy. SageFleet can be deployed on as few as 2 vehicles, and can be scaled up to cover literally thousands of mobile assets in the field. With no equipment to buy and no software to maintain, this service allows organizations to implement the very latest fleet monitoring service without the risk of purchasing hardware which may quickly be out of date.
Sound interesting? Give us a call and we will be happy to show you how you can start improving your fleet’s productivity