Managing a vehicle fleet is an indispensable part of running a larger contracting business. However, it can also be a challenging one, with many factors to track and high expenses to deal with. Adopting a tech-centric management strategy can help businesses overcome these challenges.
New technologies like artificial intelligence (AI) and the Internet of Things (IoT) hold significant promise for fleet optimization. Here are five strategies contractors can adopt to capitalize on that potential.
1. Reduce Repair Costs with Predictive Maintenance
Keeping vehicles in good condition is one of the best practices for fleet management but can be difficult with conventional approaches. Running vans to failure leads to costly breakdowns, but schedule-based preventive repairs can lead to a lot of downtime. Predictive maintenance provides a better path forward.
Predictive maintenance uses IoT sensors to track vehicle health factors like engine heat, vibrations or repair codes. When these systems detect an issue, they alert relevant employees so they can schedule timely maintenance. As a result, contractors can fix vehicle problems while they’re still small and avoid time-consuming repair inspections simultaneously.
This tech-centric approach to maintenance reduces unscheduled vehicle downtime by 25% and cuts annual repair costs by $2,000 per vehicle on average. While any preventive care is better than run-to-failure models, only predictive maintenance can achieve this level of savings.
2. Optimize Routes with AI
Inefficient routes are another common obstacle for fleets. Many contracting businesses understand the importance of planning routes in advance, but even then, changing factors like traffic and road closures can disrupt operations. The solution is to automate this planning through AI.
AI is often better than humans at finding trends and gaining insight from data. As a result, it’s the ideal technology to analyze road conditions, route lengths and other relevant information to find the most efficient way forward. Contractors don’t need to have extensive AI programming skills to take advantage of this, either, as off-the-shelf AI route planning systems are available today.
AI route planners can find faster paths humans may miss and account for real-time updates. As a result, some companies have saved as much as 20% on route time, distance and fuel consumption.
3. Use Telematics to Enforce Safe Driving Policies
Optimizing fleet operations is also a matter of addressing unsafe or inefficient driver behavior. If contractors don’t drive safely on their way to a job, it can have serious consequences. Aggressive driving can increase fuel consumption and vehicle wear, and distracted driving caused more than 400,000 injuries and 2,841 deaths in 2018 alone.
Contracting businesses must hold their employees to a higher standard to avoid these consequences, and telematics provides a way to do so. Telematics systems can track vehicle locations, speeds, braking, turning and more to highlight driving patterns. With this data, companies can recognize and reward their best drivers and learn which employees need additional training.
Telematics’ transparency holds employees to a higher standard, with both rewards and penalties encouraging compliance with safe driving policies. As workers drive more efficiently and safely, fleets may be able to reduce their insurance premiums, too.
4. Consolidate Fleet Data on Cloud Platforms
Another helpful tech-centric fleet optimization strategy is to pull all a fleet’s data into a single point of access. Running a fleet means managing a lot of information, from repair logs to vehicle runtime to tax and registration fees. If contractors keep each of these records in separate places, it’ll be easy to miss important deadlines or possible savings opportunities.
The solution is to use cloud-based fleet management platforms. These systems let contractors keep all their relevant information in one place, making it easier to get the full picture of their operations. They can then see where and how to lower costs or improve efficiency.
For example, looking at all fleet data in context can reveal if contractors often go through toll roads and how much those tolls cost. The fleet could save money with toll transponders, but only if these fees recur frequently enough. Viewing all cost and operational information together will help make those decisions, ensuring contractors are as informed as possible.
5. Automate Repetitive Tasks
Technology can also help optimize the back-office tasks involved in running a fleet. Processes like billing and scheduling may not seem that time-consuming initially, but they add up to considerable time sinks over time. Using cloud software and robotic process automation (RPA) to manage them will give contractors more time to focus on other, more critical tasks.
Fleet management software can automatically categorize repair order data to automate approvals, scheduling and data entry related to ongoing maintenance. Similarly, some programs can automatically plan routes for upcoming jobs or assign vehicles to employees. Others can automate tax and fee management concerns like bookkeeping and alerts.
Automating these tasks will also minimize the risk of human error. As a result, contractors will experience fewer losses from mistakes and reduce the time they’d spend going back to fix errors.
These strategies hold significant potential for any contracting business, but it’s important to approach them carefully. Implementing technologies like AI, IoT and telematics can quickly become expensive and complex if contractors aren’t careful, but a thoughtful approach will make the process manageable.
Before investing in anything, contractors should review their fleet operations to see where their biggest inefficiencies lie. For some, maintenance may incur the most downtime and expenses, but others may struggle more with route planning. Identifying these inefficiencies will show which technology strategies will be the most effective. Starting with a single upgrade in these areas of most improvement will help manage technology costs.
Contractors should also work closely with technology vendors to find a solution that fits their needs. That includes comparing multiple sources and looking into vendors’ experience with companies in similar industries and situations.
Finally, contractors should ensure they have appropriate cybersecurity measures in place. Many of these technologies involve collecting valuable data, making businesses a target for cybercrime. Considering cybercrime is the fastest-growing type of crime in the US, contractors must use up-to-date security software and learn cybersecurity best practices to use new technology safely.
Optimize Your Fleet
These five technology-driven strategies can help any contracting fleet reduce its operating costs, improve safety and become more efficient. When that happens, contractors can enjoy higher profit margins, less downtime and higher customer satisfaction.
It all starts with understanding what technology is available today and how it applies to your specific business.