MPG Per Driver – Is this a valid KPI for Fleet Management?

Since the 2008 fuel crisis, many fleet managers are being convinced to measure and track miles per gallon (MPG) in an effort to reduce fuel consumption. Newer engines and vehicle designs boast lower fuel usage, but most companies are using their older vehicles longer and have very few new, fuel efficient vehicles.

So a common request among many fleets is to leverage on-board computers and fleet management systems measure MPG not only by vehicle, but by driver. Their goals are to identify drivers that violate established acceptable standards for MPG for training purposes or potential replacement. Is this a valid measurement?

Tracking MPG across your fleet makes perfect sense. Identifying those units that are consuming more fuel than others and ultimately costing more money may indicate when it makes more sense to repair or replace a vehicle. When this information is integrated with vehicle maintenance systems, there are clear efficiencies gained. Tracking MPG by route also provides useful data.

However, can accurate data be gained with KPIs that track MPG per driver? Consider these questions:
Are the drivers using the same vehicles every day?
Are the drivers driving the same routes every day?
Are they delivering the same cargo every day?
Are the driving the same routes at the same time each day?
Are the driving the same routes on a weekday vs a weekend?
Are you alerting drivers when they are exceeding MPG goals?

Optimizing fuel consumption is one of the most fundamental goals of any fleet manager, and analyzing MPG (in addition to idling, speeding, over RPM) make perfect business sense. MPG by driver may however provide inaccurate information.

If you are tracking MPG by driver, please comment on how you use it. Are these pitfalls real? How does your fleet avoid these?

Author: Frank Moreno

Fleet Management Fundamentals Podcast

Check out my radio interview with M2M Magazine, available as a podcast or streaming over the web. http://www.wsradio.com/internet-talk-radio.cfm/shows/M2M-Radio.html

Author: Frank Moreno

Fleet Management Industry Needs Standard Technologies

There are several shared initiatives across the trucking industry lately – reducing fuel, going green, paperless deliveries, improving safety, etc. – however one of the most common is supply chain visibility.

At the recent NPTC Conference, many private fleet executives voiced their concern regarding the challenges they face in integrating the many disparate technologies they use in their organization to improve their visibility across their supply chain and increase productivity. Consider the technologies that are often used in most of today’s leading fleets: routing, dispatch, fleet management, warehouse management, maintenance systems, hr/payroll systems, and financial systems are just a few of the core systems needed to run their business. Unfortunately, many of these systems are very insular in their design and provide limited data integration capabilities. For example, two of the most common routing platforms used in the private fleet industry can only export their data as a flat file or .CSV file. The same holds true for the industry’s most widely used dispatch system. Many other systems provide APIs (application programming interface) that are based on proprietary languages or formats.

It’s time for an industry group or consortium to define certain technology standards for integrating transportation systems. If we look at the global software leaders and enterprise application providers, all of them have embraced XML-based web services and service oriented architecture as the standard way to interoperate across disparate applications. This is extremely prevalent in the supply chain arena, where legacy, mainframe applications are now accessible by more current web-based systems. Karen Butner, IBM’s Supply Chain Management Lead for the IBM Institute for Business Value describes SOA as the “Blueprint for Supply Chain Visibility”.

Now is the time to standardize the data made available to and from fleet management systems (assets, accounts, products, driver performance, vehicle performance, delivery data, time and attendance data, etc.) as web services, making them consumable in a standard way by any other system. Cadec will push to be at the forefront of this initiative, and enable fleet managers to achieve better supply chain visibility and improve the overall returns on their technology investments.

Author: Frank Moreno

Fleet Management ROI Discussion at NPTC

From NPTC – While the attendance at this week’s National Private Truck Council’s conference was a bit light compared to year’s past, there was no shortage of news and interesting discussion across the industry. The Benchmarking data presented by NPTC’s Tom Moore highlighted a number of significant trends and observations:

- Customer service (mainly on-time arrivals) remains far and away the number one reason why companies operate their own fleet
- Reducing out of route miles is the top method of increasing fuel efficiency
- There is a increasing interest in leasing of tractors among private fleets
- The amount of Empty Miles Driven increased in 2008 (possible correlation with the increase in fuel prices)
- There has been a major increase in Going Green initiatives in private fleets
- With reduced number of drivers, incentive-based pay plans have increased and are working
- Technology is #10 in the Top 10 Challenges facing Private Fleets (Economy/Costs was #1)

Also, the ROI session was very interesting as leading executives from Giant Eagle, Bridgestone Tire and Cadec customer Mennel Milling presented on ROI from On-board Technology. While the current returns were not surprising (efficiency & productivity gains, automating manual processes, route optimization, reduced idle time, etc.) it was the concerns they highlighted that were of most interest. Common to all speakers and consistent at the conference was the concern about the amount of data their technology systems provided and the challenges around integrating their systems and interpreting the data into meaningful business intelligence.

The concept of supply chain visibility, business intelligence and actionable information is becoming a theme across many vendors. Be sure to consider a system’s ability to provide visibility not just into its own system, but across multiple transportation systems within the infrastructure (such as Cadec’s Insight system). Cadec will be sponsoring an upcoming webcast on this topic with Fleet Owner and NPTC in June. Visit www.cadec.com for details in the coming weeks.

Author: Frank Moreno

Hollywood or Reality? Advanced Fleet Safety Technologies

In 1994, years before 9/11, the motion picture Speed exaggerated the need for improved safety and security systems on a motor coach. Most people over the age of 30 recall the movie. Fast-forward 15 years to 2009 and Hollywood recreates a similar scenario on the CBS television series Numb3rs. Yet in the episode, a new fleet management technology with real-time GPS tracking, covert emergency notification by the driver and remote engine shut-down technology brings the hijacked bus to a controlled stop by safety officials and authorities!

Is this technology real? What about for the trucking industry? With the recent increase in cargo theft and the heightened security around fuel and hazmat haulers, there is clearly a need for combining existing fleet management, AVL and mobile communications products with advanced safety and security features into one system… Check out PowerVue ProTecht Fleet Safety and Security Applications from Cadec Global.

Author: Frank Moreno

Update from ALK Technology Summit – technology advancing fast, economy moving slow

Last week I attended ALK’s annual Technology Summit in Princeton, NJ. Cadec was one of many industry leading sponsors the event. The standing room only crowd (120+) of technology vendors, fleet managers, press and industry experts gathered for what ALK calls its Thought Leadership Summit to share various trends and observations in the areas of transportation safety and efficiency in the trucking industry. While there was an obvious focus on navigation systems, the sessions also covered a wide variety of industry trends and other technologies.

An interesting, yet sobering keynote address by US Express’ President John White showed the concerning state of the for-hire trucking industry, particularly the large TL carriers, as a result of the economic slowdown. White also shared insights on a number of hot industry topics, including Card Check, HOS Regulations and EOBR Mandates.

Mr. White also shared his success using routing software in a presentation with TMW Systems, highlighting how they can compare planned to actual trip data to gain efficiencies.

The use of handheld computers was also a common topic, both to run turn-by-turn navigation software and proof of delivery applications.

Another observation was that most of the fleet attendees were in the for hire markets. While we are seeing significant growth in interest for turn-by-turn navigation among private fleets, and more stability in their financial situations, there were very few of these companies represented at the Summit.

In all, this was an interesting event that will likely increase in size next year as the use of navigation systems in trucking increases, particularly when integrated with on-board computers and fleet management software. I would recommend marking your calendar for this next year.

Author: Frank Moreno

The ROI from Transportation Business Intelligence

It’s amazing how business expenditures are allocated in a down economy. Value and ROI are no longer the driving forces behind capital expenditures. Price is now the primary influence in many purchases, particularly in transportation technology. Additionally, unbudgeted expenditures are basically non-existent – regardless of the price or the payback.

However, those companies that are confident that conditions will soon change and are visionary in their business objectives are now seeing tremendous success. One area where supply chain executives and transportation decision makers are now investing in is Business Intelligence for their transportation operations.

While traditional fleet management systems have focused on the performance of mobile assets (the truck and driver), today’s advanced applications are now interpreting that data into actionable business information across the supply chain. At-a glance-views of business trends, customer impact and business unit performance provide users with the ability to manage by exception and greatly improve visibility across the entire mobile supply chain. But how does the value of providing better service to customers and the value of people making better decisions faster translate into ROI? Can optimizing business processes within transportation and delivery operations yield a tangible ROI?

Transportation Business Intelligence offers a dramatic ROI. Businesses can make better, quicker decisions through facts-based analysis. It's not just about getting the right information to the right people at the right time, he said, but determining that the information is in fact being used to make better decisions. An informed transportation executive can leverage a business intelligence dashboard to identify an event or trend, drill down into detail, determine the root cause for that event, and quickly implement a change that can drive new sales, avoid costs, etc. Essentially, executives can now get the information they need to manage their business, and the ROI is seen across the supply chain in drastically reduced costs (labor, fuel, maintenance, etc.), increased revenues and improved cash flow. Additionally, BI users are defining new performance metrics for their transportation operations that can provide new levels of operational efficiency (route optimization, on-site invoicing, inventory management, etc.)

The most significant ROI of implementing Supply Chain visibility and transportation business intelligence tools, is the competitive advantage for businesses that are optimized to thrive immediately when the economy begins to improve. While competitors will be buried in useless data and reports, dashboard users get faster access to real-time data so they can get straight to the problem right away, manage their business better, and respond to changes in the market better.

Author: Frank Moreno

Cadec Highlights Momentum at Annual User's Conference

After a bit of a hiatus, the Cadec blog is alive and well. Last week Cadec sponsored its annual User’s Conference in Boston, MA. With over 100 attendees present, customers invested two full days in training classes, conference presentations, PowerVue product demonstrations and breakouts including keynote presentations from Aberdeen Group’s Brad Wyland and Blue Sky Technologies President Steve Hensley. The partner pavilion included many conference sponsors – Syntelic Solutions, Motorola, Honeywell, MultiTech, ALK, Telapoint and Velociti.

Customer presentations were the highlight of the event, with Poland Springs sharing how their idle reduction initiatives have saved them thousands of dollars in fuel expenses; Greyhound Lines, Inc. discussing their fleet management and safety investments and BRT, Inc. reviewing how they have customized and integrated Cadec with other fleet-related systems.

Despite the economic conditions, many customers expressed their intent to continue to invest in technologies that can optimize their visibility across their supply chain, to make better business decisions.

Immediately following the conference, Cadec publicly announced their additional funding from Thule Investments. As the fiscal Q1 came to a close, Cadec is riding tremendous momentum into Q2 2009 with new customers, new partnerships and new product offerings.

Author: Frank Moreno