Fleet management: how it works, how to improve it, and what's the future
By FarEye | October 13, 2022
With businesses now digitalizing almost all of their operations, it’s safe to say that the field of logistics cannot stay behind! Today the terms fleet management and modern delivery technologies go hand-in-hand.
As complex as it may sound, any organization that requires commercial vehicles to carry out day-to-day operations requires an efficient system to manage the fleet. That is where fleet management comes into the picture.
What is fleet management in logistics?
Fleet management is a practice that allows organizations to manage and coordinate delivery vehicles to achieve optimum efficiency and reduce costs.
The practice of fleet management is used for not just vehicles but also to monitor and record couriers and delivery personnel. It requires a system of technologies that make it easier for the fleet manager to coordinate the activities - right from fuel management to planning the routes - that can be easily managed using fleet management software.
Fleet management software acts as the central point to monitor otherwise time-consuming processes on a real-time basis, and thus acts as a critical component in making efficient business decisions.
How does fleet management work?
While on the surface, fleet management software looks like an easy way out of the array of complexities that companies possess, fleet management technologies can only be utilized to the best of their potential, when other aspects are in check.
GPS tracking forms the basis of the fleet management process. It is used to monitor the vehicles and knows the exact location, which can be viewed using the software by the fleet manager.
The software that acts as a dashboard, not only provides vehicle tracking but would also provide information on other aspects of driver safety and performance while being on the road.
Through telematics, it is easier for fleet managers to gather information about acceleration, speed, braking intensity, and fuel consumption of a vehicle to know when maintenance and repairs would be required.
The sensors are used to detect any abrupt movements such as speeding and harsh braking to get a fair idea about the behavior of the driver which directly affects the fuel consumption by the vehicle.
Compiling the records and maintenance costs of a fleet can be enormous. Using a fleet management system helps in reducing the costs by undertaking the servicing of vehicles on time and negotiating maintenance deals as well as scheduling deliveries in advance.
8 Ways Modern Fleet Management Technologies Can Drive Delivery Efficiency
There’s a good reason why fleet management technologies have taken over the world of logistics and transportation for businesses. Not only have they made the process easier but have also enhanced delivery efficiency owing to the array of benefits that it offers.
1. Real-time dynamic routing
Real-time dynamic routing refers to route optimization for efficient planning as it allows fleet managers to utilize real-time insights and data. It takes into account multiple facets such as same-day delivery, the volume of goods, weather conditions, and the flow of traffic.
It increases the reliability of the business organization in adhering to their timelines and deadlines. Furthermore, it helps drivers save time, allowing them to undertake more deliveries in a single day.
2. Interoperability with legacy systems and third-party IT infrastructure
Traditional logistics systems are notorious for being incompatible with other systems and act as a major hurdle. The lack of interoperability results in poor visibility, inaccurate insights, and inefficient logistics operations.
Modern fleet management systems are perfectly interoperable with legacy systems and other third-party IT infrastructure, making the process of syncing data a breeze. The interoperability allows the system to pull data from multiple sources onto a single dashboard and provides a seamless experience to the fleet managers with transparent and reliable data.
3. End-to-end real-time visibility
End-to-end real-time visibility is the availability of data across the supply chain which enables better decision making and overall improvement of performance.
A modern logistics management platform utilizes artificial intelligence and machine learning to provide the power of planning, allocation of fleet and drivers, and tracking from a single point.
Aggregated data, automated reporting, and enhanced visibility on a real-time basis across the supply chain systems increase productivity. It identifies potential disruptions and enhances transparency for the customers and the business organization.
4. Intermodal transportation visibility
The intermodal transportation chain is complex as it involves the transportation of goods using an intermodal container through multiple modes of transportation. The non-linear nature makes it difficult for enterprises to track their exact location.
But with automated systems, the intermodal transportation visibility has been enhanced that helps in coordinating and executing the plans seamlessly. It also enhances operational capability and ensures that the shipments are handled with best practices and utmost care.
5. Electronic proof of delivery
A major perk of moving logistics towards digitized means is an electronic proof of delivery. Going paperless not only reduces your costs but also simplifies the entire process for fleet managers and workers alike.
The manual data entry process requires a considerable amount of time and energy that is now saved with the help of electronic means. It provides the necessary and all relevant information to the drivers too, making their job easier.
6. Delivery automation
Automating core delivery processes like scheduling, task allocation and route planning optimize costs by reducing investments in manual and repetitive processes. It also eliminates the chances of manual errors and reduces delivery turnaround-time.
7. Accurate KPI benchmarking
Efficient delivery operations can only be achieved if the essential KPIs are tracked regularly and the discrepancies are rectified at the right time.
From choosing the correct routes, on-time deliveries, to regular communication with the customers- a modern fleet management system would provide enterprises with the right set of tools to seamlessly conduct their operations and measure their KPIs in accordance with their overall business goals.
8. Contactless delivery
To minimize or eliminate physical contact and comply with the rules of social distancing, fleet management software can allow the customers to know when their products have been delivered and confirm delivery through electronic signatures. It also enables them to pay for the same using digital wallets and keeps them in the loop at every step of the process.
The Impact of Efficient Fleet Management in Shipping Operations
The efficiency that a fleet management system offers seems to have no bounds. Shipping operations when undertaken with proper planning lead to enhanced productivity and satisfied customers. Overall, it’s a win-win for all stakeholders involved in the process.
Enhanced customer experience
Whether it’s B2B or B2C operations, fleet management allows the customers to be informed throughout the process of receiving their order, at the right time and in the right manner.
With GPS tracking of their order at every step, one-day deliveries, scheduling deliveries as per their convenience as well as paying through digital means, an efficient system enhances the customers’ experience multifold.
Increases delivery profitability
Dynamic routing allows the organization to undertake more deliveries in one day by saving time. It also increases the productivity of the employees by making sure that they are directing their efforts towards multiple deliveries, instead of being stuck in bad traffic conditions, thereby making each delivery trip more profitable.
Efficient 3PL management
Third-party logistics (3PL) can handle every aspect of the process - from the manufacturer to the end-user. When incorporated in the right manner, a 3PL can help in gaining competitive advantages, cut down on costs and also boost customer service.
Efficient 3PL management will help an organization to streamline their logistics process in a better manner and can also provide insights into issues that might affect the process, right from documentation, customs, and other regulations and protocols.
Greater control over fleet operations
With the entire control in one dashboard, fleet operations can be monitored at any given time by the fleet manager. An efficient system enables streamlined delivery and shipping by empowering the business with predictive analytics and increased flexibility. The end-to-end control ensures on-time deliveries and complete transparency for all stakeholders, including the customers.
Improves intermodal transportation efficiency
An efficient system would also help in integrating the intermodal transportation objectives with the objectives of the enterprise. It would leverage the technology to refine and standardize the process of scheduling, routes, deliveries, and billing.
With all stakeholders present on one platform, it gives a clearer picture of shipment data and ensures that the intermodal network is running efficiently.
Helps achieve a perfect order index
Perfect Order Index is one of the most critical KPIs for a logistics firm to measure how many orders have been shipped and delivered in the right condition. Attaining a high perfect order index is an important goal alongside an efficient supply chain as it is indicative of the overall efficiency of the organization.
A logistics management platform allows you to measure this KPI to minimize accidents and monitor the established benchmarks.
Adherence to on-time in-full deliveries
The main goal of every supply chain organization is to ensure that the customers receive the products they need, within the stipulated time period and in the quantity they ordered.
Fleet management helps fleet managers identify the fulfillment issues and ascertain the performance of suppliers. It keeps them well-informed about inventory, warehouse organization, manufacturing faults, and timely delivery of orders.
Reduced carbon footprint
Every organization is responsible for doing their bit for the environment in which they conduct their operations and supply chain organizations are no different. It is essential to utilize a logistics platform to reduce their carbon footprint by embracing greener means.
Machine learning in logistics management software is able to provide you the means to plan out your fleet routes efficiently and fuel management. Furthermore, the use of electronic means also helps in saving paperwork and hard copies of documents.
The Future of Fleet Management
Fleet management solutions have come a long way but truly, this is just the beginning.
It was until a few years ago when robots and electric vehicles seemed like a distant sci-fi dream to most of us. Cut to 2021, wherein not only are these dreams becoming a reality but are right there, knocking on our doorsteps.
Robots: The New Delivery Personnel
Giants like FedEx, Amazon, and Uber are increasingly turning towards advanced technologies with robots delivering groceries and food, and more so during the pandemic. With the emphasis on contactless delivery, it’s just a matter of time for retail, restaurant, and e-commerce firms across the world to adopt autonomous delivery methods.
Automated deliveries can help reduce delivery costs by significant margins which is another reason this transformational technology is in high demand.
Last Mile Goes Green
Achieving last-mile delivery is a herculean task in itself. Add to that the aspect of being eco-friendly, and you’ve got yourself a challenge.
However, with rising consumer awareness and environmental concerns, logistics organizations have realized that going green is the need of the hour. Whether it’s through planning the most efficient routes, choosing the right fleet, or selecting eco-friendly packaging, efficient utilization of resources is what supply chains need to encompass.
Hyperlocal Deliveries are the New Normal
Hyperlocal deliveries saw a massive rise in 2020 due to the pandemic as it eased up the process of delivering goods within small geographies. It refers to the process of delivery directly from a seller to the customer at their doorstep, within a few hours and acted as a lifesaver during the pandemic as it took care of essential needs.
Hyperlocal deliveries will continue to witness an increase with more organizations setting up their own hyperlocal delivery business models. This is to not only enhance their profits and continue their businesses but also to improve the experience of customers, in the comfort of their homes.
Deliveries at Lightning Speed
Customers are increasingly ordering more products online with a need to receive their orders as early as within a few hours. The lightning-fast fulfillment of orders has become a prerequisite today and will continue to be an expectation. Delivery operations need not only be quick but also safe so that the goods are delivered to the customers in top-notch condition and at the time they need it.
On-demand Warehousing is Impactful
On-demand warehousing refers to a warehouse sharing model that allows companies that have excess space in their warehouses to share it with another company that needs extra space for inventory purposes.
It has changed the game in the last few years as it can be used for both short- and long-term projects, which helps the firm in saving money and have more flexibility. On-demand warehouses not only help with inventory management but can also provide services that can help you get the goods to the end consumers.
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