Fleet optimization: what is it and why is it important?
Fleet optimization is the practice of increasing the utility and efficiency of your fleet. Here’s why it’s essential.
Fleet managers have to be incredibly organized. Most people who perform this job know all too well the various responsibilities they’re tasked with on a daily basis: tracking the fleet, monitoring efficiency, increasing productivity, minimizing delays, lowering cost, reducing idle time, and decreasing fuel consumption, to name a few—or a lot. The reality is that there’s so much that goes into getting goods from one place to another, and it can be hard. But fleet managers no longer have to go at it alone.
With IoT (or the internet of things), fleet owners, operators, and managers can use technology to reduce their stress and help them organize and run their fleets with more ease. Sound intriguing? Let’s jump into fleet optimization.
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What is fleet optimization?
In essence, fleet optimization is everything we just talked about: tracking the fleet, improving efficiency, and increasing productivity, only instead of doing it, you’re doing it at the highest performance possible. With fleet optimization done correctly, processes aren’t just efficient, they’re the most efficient. Costs aren’t just low, they’re the lowest.
Fleet optimization focuses on improving your fleet’s entire lifecycle, starting with financing and leasing all the way through maintenance, tracking, and compliance, to name a few things. For industries that rely heavily on transportation, fleet optimization is an important and powerful tool for improving business processes and streamlining operations.
Suggested reading: How IoT connectivity helps solve fleet management challenges
Why is fleet optimization important?
With any successful business, the goal should always be to provide your goods or services in the best way possible while minimizing costs and avoiding disruptions. Fleet management is no different. If an industry or operation involves transporting products or supplies, they should want this task done as efficiently as possible—it’s just good business.
If that isn’t enough, consider this: in one survey, 30% of companies reported saving on fuel cost after implementing AI solutions like route optimization. With the right technology, fleet operators pay less for gas, extend vehicle longevity, and avoid financing more frequent repairs, not to mention that the trucks could also be getting to their end destinations faster. Trucking costs also rose dramatically in the past year, meaning it’s more important than ever to ensure that fleets are minimizing expenses where they can. Fleet optimization can help with all of this, making it a tool more valuable now than ever.
Ways to optimize fleet management
If optimizing fleet management seems like something worth doing, you may be wondering in which ways it can actually be done. While it could differ from company to company, consider the following list.
Create a fleet replacement policy
It’s possible that you’ve noticed that the longer you drive a car, the more maintenance it needs. The same is true for semi-trucks and other vehicles used to transport goods. As vehicles get older, they just don’t run as well. On average, a large semi-truck can perform as expected for about 750,000 miles. Knowing that nothing lasts forever, the first step in fleet optimization is creating a replacement policy. Creating an overutilization boundary helps companies know when it’s time to cut their losses and replace an old truck instead of continuing to embark on costly repairs.
On the other hand, fleet managers should also be cognizant of underutilization. There is no point in holding on to assets that aren’t being used to their full potential. Managers should consider crafting an underutilization boundary as well—if trucks aren’t being used to a certain threshold within a certain time period, then it’s time to sell and use other assets more.
Fleet managers might consider implementing predictive maintenance to monitor trucks as well and ensure they’re running at optimal performance.
Utilize asset tracking software
Asset tracking software lets you see where your assets are, how they’re used, and when they’re used. Implementing this type of software can help fleet managers follow through with the replacement policy plan, as it makes it easier to track thresholds and determine if and when they’re over or underutilizing assets. You may also be able to analyze historical data to help with future decision-making. Additionally, asset tracking can come in handy should your company ever experience theft or disruptions.
Suggested reading: How cellular IoT is changing the fleet management industry
Monitor hours of service & idle time closely
IoT devices that can track and monitor hours of service and idle time can be extremely useful when understanding how a fleet is being used. Similar to asset tracking, using devices that monitor specific elements of an asset can help fleet managers understand whether they’re meeting lifecycle overutilization or underutilization thresholds. It can also be helpful in establishing these thresholds.
For example, if a trucking company has determined that their trucks tend to max out after 500,000 miles but want to understand how many hours of service that correlates to in order to best plan how they’ll use the asset, an IoT device that can monitor that time would be crucial.
Find the most efficient routes possible
Of course, one of the simplest ways to optimize a fleet is to ensure its route is the most efficient possible. Even if the difference in routes is only 15 minutes, over time, that extra quarter of an hour adds up. Finding the most efficient routes possible ensures goods are delivered on time, and it means that trips can happen more frequently. It also decreases miles and gas costs, minimizing unnecessary expenses. Tracking mileage and routes with IoT devices can provide insights that might not be as visible when looking strictly at a map or technology that isn’t collecting data about a specific truck or route.
Suggested reading: IoT Solutions for Fleet Management
Set up and use Geofencing
Geofencing uses GPS or RFID technology to set up a virtual barrier around a certain area, and this technology can come in handy, particularly for fleet-heavy operations. A geofence around a facility’s perimeter can allow owners or operators to know when a truck enters or exits the facility, including if it’s leaving at an unauthorized time, which can be extremely helpful in theft prevention efforts. Fleet managers may also be able to use a geofence around certain areas during the truck’s route to know when it has crossed certain places and to better time any preparations that need to be made before the truck arrives at the loading dock and increase productivity for the entire crew.
Track and manage your fleet with Hologram
Hologram makes it easier than ever to optimize fleets on the move. One global IoT SIM card provides access to our multi-carrier, global network. SIMs automatically connect to the next best available network no matter where devices are. Plus, the Hologram Dashboard allows teams to maintain visibility and take action on IoT devices. Get started today.