At a Glance
Several tools are available to help fleet managers make leaps in productivity, including:
- Maintenance management.
- Accident management programs,
- GPS tracking devices.
- Vehicle routing software.
Cost savings, spend management, expense control -- it doesn't matter what it's called, the goal is the same: increasing the bottom line. And, fleet managers are often called upon for their share.
Most commonly, the targets for these savings efforts begin with fees, prices, and costs that the company pays to its suppliers for their services. Knock a few dollars off the lease capitalized cost schedule. Get that maintenance management fee down. Grab a few more percentage points in subrogation. More rebate, please, Mr. Fuel Card Supplier. These things, of course, work, since the fleet market is brutally competitive, and there are always suitors looking to get business away from current suppliers.
Sometimes, though, there are things that can be done internally that will provide even more savings than "beating up" suppliers. Productivity - for example, getting drivers to do more with the same or fewer resources - can provide a quantum leap in cost savings. Here are some ways this can be done.
What is the Mission?
Companies provide vehicles to employees for any number of reasons. Sales and marketing staff utilize company vehicles for travel and meeting with prospects or customers. Service staff drive them to install, service, and repair products. Delivery drivers transport products to the customer. Whatever the purpose, define it in detail. Know what your drivers do, how they do it, and how the vehicle helps them accomplish the tasks.
For example, field sales and marketing staff generally travel regularly, calling on prospects and customers to sign up new business, and sell more products/services to existing customers. They are generally provided a geographic territory, which can be anything from a local region to several states. Field service drivers are also given assigned territories, within which they service customers and the products they've purchased. Understanding exactly how these territories are established, and what the drivers are responsible to do is the first step in any plan to increase productivity.
For instance, sometimes service or delivery drivers have routes, or standard areas with regularly scheduled stops. The more stops that can be made in less time, the more productivity increases.
As with any other item, one must define productivity to be able to measure it. Here is where the fleet manager can get help, from the driver function itself - sales, service, delivery, etc.
Field sales staff members are judged in any number of ways, generally coming down to how much they actually sell. Sales management generally sets goals (or quotas) for sales staff, either in dollars or in units. Their activity, however, is usually measured along the way. How many sales calls they make, either in person or on the phone, prospects versus existing customers, and so forth.
Logically, the more sales calls a salesperson makes, more opportunities for new business will be uncovered, and more business will be achieved. Also, the more of this output that can be achieved using the same or fewer fleet dollars the more fleet productivity is increased.
Thus, anything the fleet manager can do to increase the number or even quality of the sales calls that field sales makes will, in turn, help boost productivity, and result in increased revenues.
Much the same holds true for both service and delivery vehicles. The more service calls or deliveries a vehicle can make, the more productive the vehicle (and the driver) will be.
But, what is productivity? It is the ability to produce goods and provide services using the resources available; and fleet managers have resources, and opportunities, to provide drivers, their managers, and the vehicles they manage with tools that will increase productivity.
[PAGEBREAK]What Hurts Productivity?
Having been defined, the next step for a fleet manager is to determine what the barriers are to world-class productivity. That is, what activity (or lack thereof) prevents drivers from achieving maximum output? What do drivers do (or not do) that prevents them from making more sales or service calls, or doing so using the same or fewer operating dollars? There are several possibilities:
Logistics. Drivers who transport product or other materials will occasionally have to "restock" these supplies, from a warehouse or a company location. The farther drivers must drive to do so, or the more often they have to, the less productive they will be.
Routing. For those drivers who drive a regular route, stopping at the same places over and over again, lack of local knowledge, or simply inefficient route planning can place a substantial barrier to maximizing productivity.
Trip planning. For sales staff who don't have an assigned route, but do cover a territory, planning trips around sales calls can be difficult; sales managers train their staff to "pack" trips, getting in as many sales calls during a trip as possible. Unfortunately, sometimes this is difficult: drivers don't make the effort, or the driver may be unfamiliar with the territory.
Excessive personal use, idling. Some drivers attend to more personal use than is reasonable during the working day. Others run up fuel costs by leaving the vehicle idling while making a sales or service call. Both hurt productivity by running up operating costs.
Policy violations, particularly for scheduled preventive maintenance, can (and will) cause increased downtime and increased expense.
Process. Fleet processes can often get in the way of driver productivity. Phone calls, reporting, etc., can (and will) take drivers away from their primary tasks.
The picture should now be clear. When vehicles are idle, sales and service staff aren't dealing with customers. When vehicles are idling, fuel is being wasted. The ultimate goal is to keep drivers on the road, help them get from point A to point B more quickly and safely, and get them out of any fleet management processes as quickly as possible.
The simplest and most common solutions to the fleet process issue are the fleet service and management programs available. Not all of them contribute to driver productivity or even have driver involvement; however, many of the key ones do.
Maintenance management is one example. Absent a maintenance management program, drivers can be deeply involved in the process of keeping vehicles properly maintained and obtaining repairs when needed. With a nationwide network of facilities, drivers will nearly always have somewhere to go to get preventive maintenance performed, get new tires, and purchase the normal repairs that fleet vehicles will need (e.g. brakes). Drivers don't need to look for shops, aren't involved in discussions with the shop, and aren't required to pay out of pocket for work done.
Try some simple math. First, determine what your drivers' time is worth. Normally, a work year is a total of 260 days; assuming an eight-hour day, that's 2,080 hours (naturally, there are vacations, sick days, as well as the fact that sales staff often work a great deal more than eight hours, with travel, reporting, etc.).
Second, determine what a good salesperson sells in a year. Let's say that it is $1 million in company products or services, or $481 per hour worked, $8 per minute.
Third, assume that each driver visits a repair facility 10 times per year, for preventive maintenance and normal repairs and tires. In a 1,000-vehicle fleet, that's 10,000 maintenance/repair events per year. Think about the leap in productivity if the time needed for each event could be reduced by a mere five minutes:
5 x $8 = $40
$40 x 10,000 events = $400,000
It is more than reasonable to assume a maintenance management program, instituted where there is none, will save five minutes, and probably more.
Let's say that a field sales rep makes 150 sales calls per year, at one hour each, with a success rate of 10 percent (15 new customers per year). Each call consumes 60 minutes. The total minutes saved in the maintenance example above would amount to 50,000 minutes, or 833 hours. The sales group would free up time to make 833 additional sales calls in a year, and the company would have 83 new customers.
One of the events that carries with it significant downtime and, ultimately, lost productivity is an accident. Most accidents are relatively minor, simple fender benders, etc. However, each one can result in hours, and sometimes days, of downtime and lost business opportunities. This is where an accident management program can really help.
Consider how many companies handle accidents internally. The driver, assuming he or she isn't injured, is likely very upset. Drivers must complete an accident report quickly and accurately. If the vehicle isn't drivable, a tow must be arranged. If it is, the driver generally must then obtain two or three estimates from body shops, and have them forwarded to the risk manager or fleet manager. A replacement rental vehicle is then arranged, and the driver is now finally out of the process.
The risk or fleet manager then must choose which estimate is best (and not from an informed position - few such managers have expertise in vehicle body repairs), and give the go ahead to the shop. Wh en the vehicle repairs are finally completed, a check must be cut to the shop before the vehicle is released to the driver, who picks it up and returns the rental: a very time-consuming process and not at all efficient.
Now, it is clear that all of the above must be done no matter how the company handles fleet accidents; however, with an accident management program, it is all accomplished with one telephone call - the accident report, setting up the rental, finding a shop, getting the estimate, and final negotiations on the repair cost. And, it is done using resources and expertise that the supplier brings, including certified body technicians who negotiate on behalf of the company. Finally, the vehicle is released to the driver as soon as the repairs are completed, since the supplier is responsible for payment.
A 1,000-vehicle fleet will generally have somewhere around 150 to 200 accidents per year. The time savings with an accident management program are substantially greater than those with a maintenance program. However, let's assume at least an hour overall.
Using the same logic, saving even 150 hours per year permits drivers to conduct that many additional sales calls, with another one or two new customers. Perhaps not quite a quantum leap, but clearly there are productivity gains to be had.
[PAGEBREAK]GPS to Increase Productivity
One of the hottest items in the fleet world surrounding productivity are global positioning satellite devices (GPS) and programs. These devices and the associated programs can really be a boon to productivity for all types of fleets.
Take a typical service fleet. A company service function handles the installation and servicing of a product, and time is critical. Drivers are assigned service calls, and subject to emergency jobs every day. A customer with a product that isn't working properly is likely losing money and possibly customers, and needs that service rep on site immediately.
GPS devices can help a fleet manager or dispatcher first find the closest representative to the customer in need. When the emergency is assigned, the rep can then find the fastest route to the customer and programs can include up-to-the-minute traffic reports to help guide the driver around trouble. Much of the same arithmetic can be done to determine how many additional service calls a driver can make with the time saved using GPS programs, or how much more time the driver will have at each call to service the customer. Productivity can get a great boost.
Another area where GPS can help productivity is in the area of vehicle misuse. Many drivers use their vehicles all day, every day on the job. Many still are limited to specific days and times during which the vehicles can be used. Companies and government users often have limits on the personal use of vehicles provided to the employees. And that is where the misuse occurs.
Drivers often use vehicles for personal business when they're not supposed to. They also report business use when the use is personal. Stopping at the local bar after working hours, running to the store during midday, or using vehicles on weekends when policy prohibits it are all difficult to detect.
GPS can provide a fast and accurate solution. Fleet managers and employers can know where every vehicle is, 24 hours a day. When a service rep is needed for one of the previously mentioned emergency calls, and it's found at a local bar for a long lunch, a driver can be disciplined immediately.
There can be legal ramifications to the use of GPS devices, particularly when there are union contracts governing work rules, as well as overall employee friction when a program is implemented. First, get an opinion from your legal counsel before equipping vehicles with GPS systems and devices; make certain your lawyers know exactly how they work, and how the program will be used.
Remember, you'll be tracking vehicles not only during working hours, but nights and weekends as well, and there may be legal issues covering this.
Drivers may also resent being tracked so closely, even if your legal counsel gives the green light to a program. It is important that a fleet manger be upfront and honest in presenting the program, and also focus on how GPS can help drivers perform their jobs more efficiently.
All in all, however, the productivity gains from the implementation of a GPS program can be huge, both in helping drivers be more efficient in the use of their time as well as tracking and acting on vehicle misuse.
There are fleet applications that involve routing. Delivery or distribution fleets' productivity is almost entirely dependent upon how efficiently they can cover their assigned routes. Routing software provides an excellent solution to the routing challenge.
Using parameters entered by the user, routing software can provide each driver with a detailed route designed to allow them to cover all customers and all stops as quickly as possible. Routes can be changed or edited in mid-use, and some suppliers can provide drivers with handheld devices, which provide routing, and can be integrated with a GPS service for a complete solution.
Getting drivers from their base, to a warehouse, to the customer can be completely automated, and the productivity gains will be substantial.
Put a Price on Productivity
As we've seen in previous examples, the first steps in looking for that quantum leap in productivity is to define what a fleet driver's mission is; exactly what is the vehicle's job. Then, put a dollar figure on productivity; price out what a driver's time is worth, whether it consists of sales dollars, number of sales or service calls, time between jobs, or time on each call.
Next, determine how productive drivers are today:
- How many sales calls does a driver make each time period?
- How many service calls?
- How many deliveries?
- How much time does each event consume?
- What is the cost of each event?
- How much revenue does an event produce?
Fleet managers can't measure improvement until it is apparent where the fleet stands today.
Know what the impediments to world-class productivity are. They can include:
- Inefficient routing.
- Lack of information on driving times/routes.
- "Packing" sales trips.
- Excessive idle time.
- Driver misuse.
Now, use the solutions available to the company to achieve that quantum leap in productivity. Begin by looking at all of the basic fleet functions, and how fleet progra ms can help make them more efficient. Programs that can provide resources and expertise that do not reside in a typical fleet department/function can get drivers out of the process much more quickly, and save hundreds or thousands of hours of productive time. These include maintenance and accident management programs, as well as other automated processes that keep drivers on the road.
Consider the implementation of a GPS program. This will help the company know where drivers are at all times, which is particularly helpful for service fleets. The fleet manager or dispatcher will know who is closest to the customer, and the GPS can tell the driver how to get there. Be sure to get the go ahead from the company's legal counsel before implementing such programs.
Finally, routing software services will help delivery and service fleets to make more stops more quickly than ever before. Integrated with other services (such as GPS), routing programs can provide your fleet with a fully integrated solution, and the gains in productivity will follow.
Bottom line? Do the homework necessary to know where the fleet stands today, then take full advantage of all of the programs and services specifically designed to increase the efficiency of any fleet. Achieving a quantum leap in driver productivity can be done, and the longer a fleet manager waits to do it, the more money goes out the door.