Facebook     LinkedIn     Twitter     Google Plus     Jobs     RSS

Business Fleet - Current Articles

November 2008, Business Fleet - Feature

Using GPS to Measure a Quality Stop

by Colin Sutherland

SHARING TOOLS        | Print Subscribe

When you think of fuel costs, do you think of the price per gallon or do you think of the importance of each trip you make? Have you ever thought that your company appears to be keeping busy, but company growth is not reflecting the activity level?

GPS tracking technology promises to reduce the number of miles your fleet vehicles drive. But it's less about reducing miles or the most efficient trip—it's about valuing the quality of the stops you make.

Example 1

A distributor plans a 64-mile route—32 miles out, 32 miles back—to make an $80 delivery with a $20 profit margin on the goods being delivered. The minimum fleet cost to deliver any product or service on a 64 mile trip is $0.50 per mile, so this trip has a net loss of at least $12.

The distributor just paid the customer $12 to deliver the product to them.

Action Step: Create a Customer Profile

Profile each customer into a "customer type" and assign a priority on a scale of 1 to 5. Single piece, low margin, but frequent order customers can be grouped and served at greater net profit inclusive of the physical delivery costs.  

Example 2

A national field service organization has several branch offices. Each branch office has an average of 16 vehicles. The company decides to deploy a GPS system to measure activity through the day, the number of customer stops, the duration of each stop, the distance between stops, the total miles driven, the starting time in the morning and the arrival time at the end of the day.

Before deployment, each vehicle drove an average 987 miles per week and made 20 customer stops (Chart 2). After deployment, the vehicles average 1,060 miles per week and 25 customer stops.

As the fleet manager, you care that these vehicles are driving more than they did before GPS and are therefore costing more in fuel. But consider this—the average mileage to serve each customer dropped by about seven miles by deploying measurement-based GPS technology. It is costing the company at least $3.50 less on average for each customer visit at $.50 per mile. Who has their eye on the ball for the company—the person wanting to reduce overall miles or the person managing miles and customer activity together?

Action Step: Measure Average Miles per Customer Visit

By valuing fuel and activity together, your company can best see the impact of fuel combined with mileage and customer visits.

Include Engine Diagnostics

Using asset management tools with engine diagnostics capable of reading VIN, mileage, voltage, oil and active engine faults will enable you to extend the maintenance of your fleet to a cycle of health-based maintenance. By monitoring the vehicle's engine health, you can keep your fleet running at the lowest preventive maintenance costs possible.

The Big Picture

"You can't manage what you don't measure." In good economic times, measurement technologies that include GPS with engine diagnostics, driver safety and mileage recording technology are often used to improve driver safety and reduce fleet operating costs.

Today, measurement technologies are even more needed to plan and make strategic decisions on where and how to direct field resources, sales, technical, support and delivery–everyone you've got.

Action Steps: Set Goals Based on Priority Customer Visit

  • Record, measure as much as you can.
  • Review how time is spent including commuting to work, while driving and with customers.
  • Set goals based not solely on daily miles driven but on reducing the average number of miles per priority customer visit and measuring fuel consumed per customer trip.
  • Monitor goals and communicate positive results with employees.
  • Repeat steps 1 to 4.

Colin Sutherland is vice president, sales of Geotab Inc. (www.geotab.com), a leader in developing tools using GPS, engine diagnostics, and driver safety information for companies in North America.

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  

E-NEWSLETTER

Authoritative & Targeted! We offer e-newsletters that deliver targeted news and information for the entire fleet industry. Subscribe to one or all of them...they're FREE. SUBSCRIBE!

View the latest eNews DRIVING FORCE

ARTICLE ARCHIVE SEARCH

Popular Tags:

Fleet Job Finder


Save time and money. Search for fleet jobs. Advance your career. Access our career coaching services

Job Seekers

  Post your resume & manage your job search.

Employers

  Post jobs & search top quality resumes.

Featured Jobs

BLOG

Driving Notes

Stephane Babcock
2014 Mercedes-Benz Sprinter 2500 Van

By Stephane Babcock
The 2014 Sprinter features a 2.1L four-cylinder BlueTEC diesel engine as standard equipment, which quickly picked up to highway speeds as soon as I made my way onto Southern California's San Diego (405) Freeway.

2014 BMW 328d xDrive Sedan

By Chris Wolski
The BMW 328d is one of the new-generation diesels that don't announce themselves a block away, offer smooth handling and great highway and city performance, but just sips fuel whether you're zooming at maximum highway speed or are stuck in traffic.

Market Trends

Mike Antich
The Curse of Running a Well-Managed Fleet

By Mike Antich
A fleet manager’s capabilities and expertise can be easily overlooked by executive management, especially when a fleet is well run. When fleet runs smoothly, it tends not to be on the radar of senior management, who, often, are not aware of the required behind-the-scenes expertise. However, the biggest curse to running a well-run fleet is that it sometimes breeds complacency. Here's how to avoid it.

OTD Concerns Due to Surge of Oil Shipped by Rail

By Mike Antich
The railroad industry is the primary long-distance shipper of automobiles from assembly plants to dealers, which represents almost 9 percent of total rail freight. However, the auto industry is not the only railroad customer, and it competes with other shippers for scarce rail resources. Such is the case with petroleum companies shipping crude oil by rail, which is putting heavy demand on finite rail resources. What impact will this have on fleet OTD?

Using Service Vehicles as Employee Recruiting, Retention Tools

By Mike Antich

Using ‘Gainsharing’ to Achieve Sustainability Goals

By Mike Antich

Auto Focus

Chris Brown
A Call for Recall Preparedness

By Chris Brown
In light of the massive recent automotive recalls, car rental companies should prepare for the Big One by acting out a “recall fire drill.”

What I Learned at the 2014 Car Rental Show

By Chris Brown
If the Car Rental Show is an indicator of the health of the industry, the North American market is doing well — while the "growth markets" are really taking off.

Remembering Elaine Litwer

By Chris Brown

6 Market Predictors for 2014

By Chris Brown

STORE

$5.00

Business Fleet - May/June 2013

In This Issue:
Here are some of the Highlights:

  • Best Fleet Value in America
  • Why It’s Important to Secure Your Load
  • Fleet Profile: Bringing Nostalgia to Life
    And much more…