Fleet monitoring as a cost reduction solution

Due to the political and economic situation that plagues Brazil, we have noticed that large companies, as a way of mitigating the effect of the crisis, have invested in solutions and studies to minimize the inefficiencies of their logistics operations, usually through gains in productivity, whether on the operation en casa or, mainly, in transport operations.

What we have noticed from the projects we have developed in companies from the most varied sectors is that few monitor their fleet. It is common for the fleet to be tracked, either for equity reasons in the case of sectors whose products have greater added value or simply as a way to lower the cost of vehicle insurance. According to research published in Panorama ILOS Logistic Operators and Railways (2016) Based on the survey carried out by Tecnologística, 91% of the carriers analyzed have some type of fleet tracking, whether owned or outsourced. However, the concept of tracking is different from monitoring, which we are talking about in this post.

Pure tracking will only report the location of the vehicle when desired, passively. Therefore, it is not possible to take measures to avoid accidents or delays in deliveries for that trip. The concept of monitoring is broader; it uses tracking to actively manage the fleet. It brings benefits to the company both in terms of driver safety and cargo theft, as well as logistical gains.

Going deeper into the Logistics issue, monitoring can help companies in times of crisis. With the correct parameterization of the system and input of order and trip information, the system triggers alerts for the Control Center operators, informing when a driver deviates from the route, when he reverses the delivery of customers, or stays longer in a place than due or expected. When an event is triggered, the operator contacts the carrier's representative or automatically triggers an alert for the driver to follow the scheduled trip. In this way, the trip cycle time is reduced, consequently impacting the productivity of the fleet.

Figure 1 - Monitoring Center – When an event triggers, the Central operators contact the carrier

What we observed is that drivers modify their driving just because they know they are being monitored, even if they are not initially contacted for any deviation. This behavior by itself already reduces the cycle time of the trip. Another performance gain provided comes from the increase in the reliability of information about the location of the vehicle. When you have greater predictability of when the truck will return to base, it becomes plausible to schedule a second trip. Other benefits are also provided by the Center, related to the safety of the cargo and the driver, such as the reduction of average speed, of stops or passages on unsafe roads, etc., and even better management of the drivers' journey and the use and availability of the fleet.

Figure 2 - Monitoring as a means of reducing costs

A Programming and Control Center with fleet monitoring can be set up within the company itself, with employees and logistics intelligence developed internally, or outsourced to companies specialized in this type of service. Each model has its pros and cons. The internal operation guarantees the confidentiality of the company's operation and can allow for synergy with operations in other sectors of the company, taking advantage of fleet idleness, for example. However, it can be more expensive than outsourcing. This has scale, as it monitors vehicles from several other companies as well, in addition to having the expertise on how to operate this operating model, while the company would need to develop it. However, certain customizations would be interesting for some companies, including the exchange of data with other company software, such as freight auditing and online order status control, and they would be much more complex if they had to be done from the a third-party company. Finally, depending on the size of the outsourced company, it may be more rigid in terms of the variety of tracking devices identified and whose information is read by its software. This barrier could be broken if the company's software were customized to support the technologies it chooses to adopt.