What drives the ROI for fleet management?
It seems that every organization whose operation requires a fleet of cars is seriously considering investing in a fleet management system which, among other features, tracks the location of each vehicle. Most of the exceptions to this statement are organizations which have already deployed such systems.
What drives this decision?
Some clues may be found in a study published by Frost & Sullivan in February: The Essential European Fleet & Asset Management Update. If you go there and scroll to slide 6, you’ll find that the typical cost savings per vehicle per month are £233. Impressive, right?
But wait, there is more information there. This amount is the sum of several different contributions – increased productivity, fuel consumption regulation, effective route planning and more. Well, one of these accounts for savings of £126 – over half of the total monthly savings. Care to guess which one?
Here’s the answer: Over half of the total savings is due to effective route planning.
In other words: The value of fleet management is not in the “big-brother”-like knowledge of where your workers are or where they have been. The value is driven by planning where they will be, and dynamically changing the plan in real time as new information comes up (cancelled jobs, unexpected absences, new urgent jobs, traffic delays, …).
Lastly, let’s talk about environmental impact: How green is fleet management? The report has quite a bit to say about that, as well. I think it would be hard to find another investment with such proven ROI which also makes life better for us and for the next generations.
What do you think? How does route planning fit into the fleet management solution? Are organizations that don’t deploy route planning missing out on the best part of fleet management value?