In my previous blog, I outlined the merits of an FMIS system and the significant benefits you can expect if you deploy it – in fact in highlighting the merits of the system, I have essentially explained why you need it but just in case you remain in any doubt as to the merits of such a move, let me outline exactly why you need a Fleet Management Information System (FMIS) solution in place.
Let’s start with a brief recap.
The goal of FMIS is to reduce the total cost of ownership (TCO) and deliver an improved cents per kilometre (CPK) outcome. Basically, FMIS provides control over the entire fleet with real-time data, improved operational efficiencies and inevitably better ROI.
It is a particularly attractive proposition for fleet managers/supervisors as they leverage their drivers as assets (rather than liabilities). Software vendors like Fleet Domain, are incorporating more out-of-the-box features for driver management/behaviour monitoring – this latter is crucial, without the ability to change driver behaviour, there is no ROI. It enables businesses to manage, monitor and control their fleet with real-time data; Improved operational efficiency, and better insights that support quicker and informed decision making.
So, if you are still asking why you need a fleet management system – please read on.
Your drivers and your vehicles are amongst the core components of your business, and the management of both is vital, not only to limit costs, but to keep your company operating as efficiently as possible.
Vehicles are expensive to buy, equip and maintain, and no matter how many vehicles you have, your fleet costs probably form a large percentage of your budget. It is common knowledge in the industry that the operating cost of most unmanaged fleets are 10% to 15% higher than it should be. Aside from the depreciation on the vehicles themselves, fleet costs include items such as maintenance, tyres, fuel, accidents, licences, permits, tolls and fines. Based on the average running cost of a vehicle, it is probable that your vehicles are each costing you between R 6 000 and R 12 000 per year more than is actually necessary.
Fleet administration is time consuming and laborious. You know just how many forms need to be completed and how much time it can take at the traffic departments whenever you need to do anything that is vehicle or driver related, and if you are not aware of additional requirements, such as the number of copies, ID photos, ID book, copies of ID books, driving licences, medical certificates etc. then this could necessitate multiple trips. This in turn is chewing up valuable time that could be better spent in focusing on growing your business.
The full implementation of the AARTO system will introduce a whole new set of problems. Besides the increase in complexity and administration, it is vitally important that any fines accrued by your vehicles and drivers are managed correctly, as mistakes or misunderstandings can result in your driver’s licences being suspended or cancelled, or even the loss of your operator’s licence.
It is crucial to limit downtime of both vehicles and drivers. If they are not out on the road, they are not earning money for your business. Vehicles parked in a workshop or panel beater, or waiting for permits or licences, are not productive, and a driver waiting for a licence or PrDP cannot go out and earn money for your company. More importantly, you cannot afford to send out unlicenced vehicles or drivers, as both the financial risk and potential liability, could cripple your business.
And last, but not least, you need a fleet management system so that you can make informed decisions about the running of your fleet.
You need to ask some questions such as:
- Are you using the right vehicles?
- Are they costing you too much to maintain?
- Are they breaking down too often?
- At what point should you replace your vehicles, and when you do, which vehicle should you replace them with?
- Are your vehicles too heavy on fuel, and if you think they are, how would you know, and what do you compare the fuel consumption to? Can you identify possible fraudulent transactions?
The one question you should not be asking as this point is “why do I need a fleet management system”? By now it should be obvious that an FMIS solution is not a nice to have in your business but is imperative to survival, and growth.
Brief Biography: Johan van Niekerk Johan van Niekerk, Consultant, Fleet Domain – a member of the Argility Group.
Johan van Niekerk boasts 34 years’ experience in fleet management, sales training, and consulting. His skills include fleet data analysis, reporting and financial expertise. He has a profound understanding of the fleet industry including funding options, safety, and risk assessment plus the development of safety, driver, and vehicle policies.
Over the years he has gained experience conducting fleet evaluations and audits plus providing fleet management training to executive and various levels of management personnel. He has also conducted fleet sales training courses for manufacturers, automotive groups, and dealerships.
Johan places improvement of ROI in corporate enterprises and parastatal organisations through fleet optimisation – as his main business objective. He also assists businesses with budget development, scenario analysis, forecasting and ultimately the entire management spectrum of corporate fleets from procurement through to disposal.