Fleet Domain, part of the Argility Technology Group, has announced best practices aimed at reducing fleet management costs and delivering a successful fleet management programme.
“Cost savings are fundamental to successful fleet management. They impact bottom line, operational efficiency and the ability to remain competitive in the market,” says Johan van Niekerk, Fleet Solutions Consultant, Fleet Domain. “Implementing strategies to control costs while maintaining high-quality services and safety standards is essential for any business that relies on a fleet of vehicles. Fleet cost savings are driven by having enforceable fleet policies in place that govern corporate safety, health and risk issues. Fleet costs are recognised to be managed and reduced by following internationally accepted principles that cover:
Van Niekerk confirms that without having all three of these pillars in place, a company will be unable to manage safety, risk mitigation and operational fleet costs. “All the above are geared to focus on reducing and improving the cents per kilometre (cpk) cost of a fleet.”
"FleetDomain's Online Fleet Management Information System (FMIS) produces comprehensive centralised information reports. These encompass all facets of fleet management, spanning vehicle selection, acquisition, procurement, delivery and termination, as well as tracking integration, accident records and fines. Succinctly put, our FMIS provides the market with cost-effective, innovative and dependable fleet management," Van Niekerk concludes.
For further information, click here to be redirected to the FleetDomain website.
Source: ITWeb | Security Solutions
Determination of the precise total cost of ownership (TCO) related to operating fleets has always been difficult. According to Johan van Niekerk, Fleet Solutions Consultant at FleetDomain – an Argility Technology Group company, this is due to various issues including lack of information due to not capturing a holistic view of all vehicle expenses from a central source.
“As South Africa moved out of the full impact of the pandemic, significant cost increases were experienced with regards to vehicle ownership – regardless of whether they related to individual citizens or businesses managing fleets. Inflation of vehicle purchase prices, maintenance, tyres and fuel over the past three years have combined to contribute to a staggering 20% to 30% cost increase for an average passenger and light commercial vehicle,” says Van Niekerk.
According to Van Niekerk, the only way to tackle this spiralling TCO escalation is to implement a fleet management information system (FMIS) as supplied and supported by FleetDomain. “To improve the costs and risks associated with fleet operations, businesses must take an all-inclusive management approach and ensure they have the information necessary regarding accidents, fines, management and personnel.”
Van Niekerk reveals some cost comparison models in the attached table:
Comparing a selection of vehicles purchased in 2019 and 2022
“Examination of the numbers in the attached table shows that expenses must be managed, controlled and reduced in line with, or below, inflation. Unmanaged vehicle expenses can end up incurring 10% to 23% greater costs than necessary. This can be explained when one considers that fixed costs are managed by accounts, and variable costs are managed, in most instances, by fleet operations. The latter can either capture all expenses, or they can implement the use of a maintenance or fuel card. In some instances, maintenance, tyres and fuel are all managed on one card,” he explains.
Van Niekerk says companies often add a GPS/tracking device to enable them to locate assets and monitor driver behaviour. By scrutinising GPS/tracking kilometre usage and comparing it with card kilometre usage, the actual usage per month can be determined.
“It is important to understand that a GPS/tracking device is not a fleet management system. Change in driver behaviour and meaningful savings will not be achieved without relevant information regarding speeding, harsh braking, acceleration, excessive idling and all the other actions performed by drivers that cause increased maintenance, tyre and excessive fuel usage. All of the foregoing can only be achieved with an FMIS.”
Van Niekerk says in post-COVID South Africa, vehicle price increases of between 27% and 32% – dependent on models and country of origin – have contributed significantly to TCO. “However, resale values of some models improved due to the shortage of new vehicles. Maintenance and tyre replacement come in at 17% to 21% of TCO, with the actual percentage increase being manufacturer/supplier dependent. Fuel has been identified as the most changed value, having been measured as a percentage of the overall at 96% to 145% (depending on mileage and application) in the TCO stakes.”
FleetDomain’s FMIS can integrate with finance institutions, maintenance, tyre, fuel and GPS/tracking service providers placing all costs on one platform. “The FleetDomain online FMIS can assist companies to receive and analyse all vehicle-related expenses and in turn aid informed decision-making regarding model selection, driver behaviour, safety and risk management,” he concludes.
Source: IT Web
by Johan van Niekerk, Fleet Solutions Consultant, FleetDomain – part of the Argility Technology Group.
The internationally accepted format of managing a fleet effectively, is that of: Assets; Fleet Operations; Driver and Safety Management. These matters are in turn all inter-related when it comes to determining the total cost of ownership (TCO); cents per kilometre (CPK) or cents per hour attached to any one vehicle.
Assets incorporates:
Managing depreciation influencers during the life cycle of a vehicle can result in a significantly improved resale value at the end of the lifecycle of a vehicle in your fleet. Depreciation as a percentage of the retail price is normally estimated to be between 35% and 47%.
Fleet Operations incorporates:
With passenger and light commercial vehicles costs are measured as a percentage (%) of the original retail price. In the case of commercial vehicles same are measured as a % of the net funded value inclusive of accessories and body fitments. It should be noted that values can differ dependant on the operational, or conditions of usage of the vehicle. Controlling these costs and managing change processes to achieve savings will result in an improved TCO.
Having these costs reflected in a Fleet Management Information System (FMIS) and managing the exceptions against stated objectives, will allow the fleet manager to make objective decisions to reduce costs.
Driver, Safety and Risk Management encompasses vehicle plus driver, licence renewals. This also covers company policies managing all aspects of vehicle usage including: drivers; driver training; accident management; GPS/tracking and reporting.
Ensuring that vehicle and driver licences are renewed timeously, safeguards companies against insurance claims not being honoured and possible lawsuits.
Policies governing driver’s eligibility to get behind the wheel of company vehicles; rules around car allowance vehicles; the necessary training required to improve driver quality; vehicle safety procedures – inclusive of COVID dictates - all contribute to a better and improved fleet operation with a subsequent reduction in costs.
It is a fact that: unless the behaviour of a driver can be changed; no savings will be achieved.
Fitting a reputable GPS/tracking unit to fleet vehicles – one that can report on the aspects that cost a fleet owner money such as speeding, harsh braking, excess idling to name just some - will have a direct savings result in fleet operating costs.
Example: reducing speeding; harsh braking and excess idling; will cut maintenance, tyre, and fuel costs. Furthermore, fewer accidents and fines received by driver will have cost reduction benefits.
Accidents and increased vehicle costs have a direct effect on the resale value on termination of a fleet vehicle.
Although the AARTO demerit system and process surrounding same was found to be unconstitutional, the problem of fines received by drivers still exists.
Companies should be aware of the number of fines received by a driver and for what reason.
Example: Drivers receiving fines for speeding can result in more accidents which can become an HR problem with associated increased costs.
It is important to take a holistic view of Fleet Management. Companies operating a fleet need to invest in a proven, tested Fleet Management Information System (FMIS) and a reputable GPS/tracking system supplier. Moreover, driver training needs to be performed by a certified/recognised vendor.
By investing wisely in this way – the business will experience positive changes around safety and risk issues with a definite improvement in return on investment (ROI).
Should you require any additional information, guidance, or training to improve the above fleet management cost contributor’s contact us on:
011 712 1300, email info@fleetdomain.net or visit our website, www.fleetdomain.co.za
Brief Biography: Johan van Niekerk, Fleet Solutions Consultant - FleetDomain
He has 38 years’ experience in fleet management, fleet sales training and consulting. Van Niekerk has a profound understanding of the fleet management 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.
Van Niekerk 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.
Elite Truck Hire – a leading transportation and vehicle leasing organisation with over 35 years’ experience in the sector – launched a search for a specialist fleet management programme that led the company to FleetDomain, a member of the Argility Technology Group.
Elite group CEO, Byron Corcoran, notes they required a solution that could act as the backbone of the growing company, streamline business processes and ultimately allow managers to access reliable data to support fact-based decision-making. “FleetDomain is a fully integrated system that runs our workshops, parts stores and operations for both our ad-hoc truck hire as well as Full Maintenance Leasing divisions. The system includes a fully integrated accounting system and has very comprehensive report generating capabilities,” says Corcoran.
“It was also important that our investment in new software was backed by a financially stable provider with access to excellent development resources to ensure continuity and improvement. The software also needed to provide a robust business process architecture and workflow that would support best practice and make it hard to commit fraud.
“I also wanted a web-based system so that it could be accessed anywhere, anytime and would not necessitate a significant increase in our in-house IT capability. We are a truck rental and leasing company, not an IT shop,” Corcoran says. “It was critical that the software included fully integrated accounting functionality rather than exporting data to a standalone accounting package.
“Since implementation, we have never experienced any adverse system issues – billing has run smoothly without any incidents from day one. From a management perspective, FleetDomain makes it easy to access the information needed to understand not only how the company is doing, but how to manage it better,” says Corcoran.
Designed specifically for the industry, FleetDomain’s software met Elite Truck Hire’s criteria and its implementation has delivered clear benefits to the group. The application is delivered as a service via a web interface, and FleetDomain is responsible for all support and development.
Key benefits that the FleetDomain solution delivers include:
FleetDomain MD, Jai Kalyan, says the relationship with Elite Truck Hire commenced in 2017 when the group first implemented the FleetDomain system to manage its then fleet of over 1 200 vehicles ranging from 0.5-ton LDVs to 14-ton trucks. “Elite later implemented FleetDomain at its Forklift Rental business during July 2019 and quickly realised the benefits of being able to better manage its business on a state-of-the-art fleet management system,” says Kalyan.
He highlights the enduring and successful business relationship with the Elite group. “We work closely with the Elite Truck Hire team to implement software improvements and provide additional value. On that note, we have just launched a complete upgrade of the software that enhances the user experience and provides even better uptime. It also adds new functionality such as graphs and a mobile app. Because the upgrade moves away from proprietary code, it will be much easier for our developer team to enhance the software going forward, ensuring customers like Elite can continue to rely on it as they grow and the market changes,” concludes Kalyan.
Source: IT Web
A series of blogs by Johan van Niekerk, Fleet Consultant, Fleet Domain, part of the Argility Technology Group (ATG) group.
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:
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.
Want more information as to how FleetDomain can help you – Contact our Business Consultants on 011 712 1300, email info@fleetdomain.net or visit our website, www.fleetdomain.co.za
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.
A series of blogs by Johan van Niekerk, Fleet Consultant, Fleet Domain, part of the Argility Technology Group (ATG) group.
Research figures are said to indicate that the global fleet management market size is expected to grow from US $19.9 billion in 2020 to US $34.0 billion by 2025* at a compound annual growth rate (CAGR) of 11.3% during the forecast period.
These statistics reflect some Fleet Management services but predominately the GPS/tracking and card methodologies – which is not a holistic representation of the full market rather only components of it.
But let’s unpack what is meant by ‘the global fleet management market’. Often statistics like this refer to GPS tracking systems – which are not ‘Fleet Management Information Systems’ (FMIS). The latter is an entirely different matter, and without a return on investment (ROI), is nothing more than a distant dream that will never be achieved and certainly not through deploying GPS tracking only.
FMIS can be defined as a “Set of theories and applications that are combined to produce an end result of a reduction in fleet Total Cost of Ownership (TCO) and an improvement in ROI”.
Moreover, FMIS is the process through which all costs relating to a fleet of vehicles are controlled by applying a specific management discipline with recognised theories and techniques. It covers system setup from procurement through to disposal. Moreover, it encapsulates all data for full fleet management inclusive of; depreciation, maintenance, tyres, fuel, insurance, GPS/tracking, accident management, licence registrations and fines management.
In a nutshell the ‘right’ FMIS solution will provide control over:
Reporting is an essential part of any system you deploy. For example, standard reports, as well as exception reports, will immediately shine a spotlight on problem areas. These reports can be scheduled to run automatically at pre-set times. Reports can be emailed to selected recipients irrespective of being logged on!
Dashboard Indicators allow you to see the state of your fleet at a glance. Exception s are Flagged which can be drilled down to with immediate report analysis.
FMIS Is:
The deployment of FMIS leads to:
FMIS also reduces:
The goal of FMIS is to reduce 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 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.
Moreover, to help fleet supervisors leverage their drivers as assets (rather than liabilities), software vendors like Fleet Domain, are incorporating more out-of-the-box features for driver management – this latter is crucial, without the ability to change driver behaviour, there is no ROI.
The foregoing highlights just some of the positive outcomes, however, despite this some fleet managers continue to question the need for FMIS. Even where executives accept it is essential in a digital age to get the right technology to improve performance and ROI the next step can seem daunting and that is determining which software best meets their fleet management needs.
In my next article I will explain why you need a FMIS.
Want more information as to how FleetDomain can help you – Contact our Business Consultants on 011 712 1300, email info@fleetdomain.net or visit our website, www.fleetdomain.co.za
Johan van Niekerk boasts 34 years’ experience in fleet management, sales training, and consulting. His skills include fleet data analytics, 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.
