Cost management and efficiency with fleet management software
One of the main benefits of fleet and distribution management software is reducing costs and increasing efficiency. In this week's mini-article on the Logiico blog, we intend to answer one of the fundamental questions in fleet management. How does fleet management software reduce costs? Stay with us to find the answer to this question.
In the series of articles published so far about fleet management on the Logiico blog, we have examined the importance of fleet management in various businesses such as the oil and gas industry, pharmaceutical distribution, and online stores and e-commerce businesses.
Cost Structure of Logistics Businesses
The mechanism of the businesses we mentioned consists of a system and various processes. These processes and activities require continuous control and optimization. The most important aspect of optimizing and controlling these processes is time and cost. Time and cost are manifested as:
- Fuel consumption
- Parts depreciation
- Human resources
These are the visible aspects.
Software platforms and control systems have significantly impacted increasing productivity by entering business processes. Many believe that the emergence of these technologies incurs high costs for organizations.
This is a misconception. Why? The answer is quite clear. The introduction of these technologies into various businesses aims to:
- Reduce costs
- Reduce human error
- Increase productivity
- Improve the quality of the product/service output
- Save time
These technologies were introduced to processes. Currently, the use of robots in warehousing, drones for delivery, smart systems and software in fleet management, reporting systems, etc., all play a crucial role in achieving these goals.
In businesses that deal with field forces, fleets, and vehicles in the city for delivery, on-site repairs, and cargo transportation, time and cost are of great importance.
The fleet of these businesses essentially carries their capital. Capital that can be lost in a fraction of time in the event of an accident. Some of the costs incurred by these businesses can be categorized as follows:
- Fleet maintenance costs
- Fleet repair costs
- Fuel costs
- Salaries and wages of staff and drivers
These are just some of the costs we can mention. According to current statistics and research, most damages and costs in these businesses are related to dangerous driver behaviors during delivery. Additionally, late delivery of cargo to customers and spoilage of perishable products can also be considered costs that cause losses and damages to the business.
Smart Reduction of Fleet Costs
The Startup Magazine in an article about fleet cost management solutions for startups suggests the following solutions for managing fleet costs:
- Driver behavior control
- Fleet tracking on the map
- Optimal fleet routing
- Control of goods dispatch operations
- Driver performance evaluation
In the conclusion of this article, an interesting point is mentioned: Spend smartly once!
Investment and spending in a business aim for nothing but growth and development. If this spending is not done correctly, it is a waste of money and time. Today's world is about turning to software and implementing processes based on information technology and computer science and control science.
To ensure that your business and organization move in the defined path and achieve the set goals, it is necessary to control and continuously optimize the processes and activities within the organization.
In businesses that deal with field forces (as mentioned), this optimization and control can be achieved using fleet management software.
Fleet management software, as the name suggests, does not require expensive GPS devices and can be easily installed on the driver's phone. Through a management panel, it provides all the information such as:
- Fuel consumption
- Number of missions
- Delay hours
- Salaries and wages
- Customer interaction
- Exact location on the map
to management. Having this information for fleet management in these businesses creates an organized and intelligent structure, simplifies the process, and reduces operational costs. Costs that are currently vital for businesses.
Conclusion
Smart managers spend smartly! It might be interesting to know that only 3 percent of logistics costs worldwide are related to the use of software. However, these software solutions can reduce costs by up to 20 percent. One of the most expensive parts of logistics is the last mile delivery, which can be significantly reduced with fleet management software.
