One of the well-known advantages of using fleet management software presents itself in the form of reduced operational costs. Plugging the operational inefficiencies makes it possible for companies to improve their bottom line and cash in their profits. However, it takes a smart fleet manager to follow a holistic approach while cutting down the operational costs with the help of effective fleet management software.
So before you bust out your calculator and start crunching numbers, here are a few cost considerations that you can monitor and analyze using a fleet management software:
Managing Total Cost of Ownership
Knowing the Total Cost of Ownership (TCO) allows you to make data-driven decisions regarding fleet management.
However, one must first differentiate the fixed and variable costs involved in the TCO. Typically, fixed costs are in the form of permits, licenses, fees, taxation, lease payments, and depreciation. Naturally, there isn’t much that you can do to manipulate these values.
On the other hand, variable costs such as fuel prices, maintenance or replacement costs, and toll charges may vary from trip to trip.
You can make use of the fleet management software’s reporting feature to create balance sheets capturing the total spends and formulate strategies to curtail these variable expenses. These reports also help with asset tracking and management, which helps in carrying out preventive repair and maintenance for keeping up with the fleet health.
Most importantly, since these reports are available in digital formats, you no longer have to pore over acres of pages to determine values. All you have to do is to set up sorting values and filters to get quick insights!
Monitoring Fuel Expenses
Amongst all the variable expenses, fuel spend accounts for the largest fleet expenses. Since you cannot control the cost of fuel, you can take proactive measures to contain the volume of fuel consumed.
Make use of a fleet management software to monitor the cost and consumption of your assets. Once you have an overview of the fuel purchase trends, you can use it to assess an average cost-per-mile estimate that will help with future expense forecasts and predictions.
Moreover, drivers no longer have to manually maintain a record of their fuel purchases in the form of receipts as they can directly log these entries into the fleet management software. As a result, they save time and overcome bottlenecks.
Updating a Fleet Maintenance Plan
Several companies erroneously consider fleet maintenance to be a cumbersome task. Monitoring the fleet’s health, taking vehicles off the road, and sending them for repair and maintenance can appear to be rather tedious.
However, this oversight can result in a complete disaster! While you may be successful in cutting down the repair and maintenance costs, you leave the door wide open for financial liabilities in cases of accidents and other mishaps.
Furthermore, the lack of repair and maintenance of your assets could result in increased downtime, faster wear and tear, and other unexpected costs.
To overcome these issues, fleet management software schedules preventive maintenance where the health of your assets is regularly updated. Stay ahead of your regular servicing, part replacement, and oil changes to improve fleet productivity. These platforms also record the maintenance history, which you can pull up to manage and schedule tasks.
Right-Sizing Your Fleet
When you have a fleet larger than what you need, you would be spending way too much on its repair and regular upkeep even though these assets never hit the road. On the other hand, when your fleet is too small, you will be unable to meet your client requirements. Hence, it is critical to reevaluate your fleet size periodically.
Having an appropriately sized fleet makes efficient use of resources. Consider selling off the underutilized assets so that you can reduce the operational overheads.
In this case, a fleet management software comes with effective asset management tools that enable the user to evaluate the cost of operation, corresponding charges relating to the maintenance and optimization of assets, and asset utilization frequency. With these insights, a fleet manager can reconsider the operational cost and right-size the fleet.
Maintain a Parts Inventory
Whether you have in-house technicians or have outsourced the asset repair and management to a third-party service provider, it would be wise to maintain an inventory of the parts. Interestingly, parts occupy over a third of the vehicle maintenance costs, and hence, a strong inventory can help monitor these expenses.
Sure, you may need a certain part in the near future to carry out repair and maintenance to your fleet vehicles. However, have you gone overboard and purchased surplus stock just to ensure that the parts are readily available? If so, you may be making unnecessary purchases that call for additional costs for storage, etc.
Fortunately, a fleet management software can grant you control over your inventory levels. This centralized database gives you an overview of the parts that you already own and the quantities mentioned against them. As a result, you can curb overspending, track quantities, reorder products when the inventory is low, and assign parts against work orders using a fleet management software.
BONUS TIP: Review Insurance Premiums
If your insurance plan is up for renewal, it may be wise to look around and consider other insurance options before hitting the auto-renewal button. Even though you may have the best insurance plan, it wouldn’t hurt to check out the prevailing rates. Several insurance companies offer reduced interest rates after your company clears its risk assessment and analysis.
If you have equipment tracking systems, telematics devices, fleet management software, and safety features incorporated within your assets, you present yourself as an attractive prospect to the insurer. You are bound to get a bang for your buck by going back into the market!
The above examples highlight how fleet management software plays a vital role in controlling operational costs. If you wish to plug in the financial leakages, you can achieve the result through a worthy fleet management software like Samsara. With an impressive ROI, it is an invaluable tool that is worth its weight in gold!