White paper from Fleetmatics
From communications and shipping, to productivity and back office procedures, technology has pervaded every aspect if the business world. But small- to medium-sized businesses (SMBs) with vehicle fleets have an additional tool at their fingertips to gain further benefits from the technological revolution.
Increased access to the global positioning system (GPS) has given SMBs a way to directly monitor and manage their most important assets – their vehicle fleets and people.
GPS tracking is not a “new” technology. It has been used by progressive fleet owners for years. Early adopters of GPS technology have given their businesses an edge over competitors.
Because of its immediately recognizable benefits, GPS tracking has quickly gone mainstream. The technology is being employed by a wide variety of SMBs including plumbing, heating/HVAC, trucking, landscaping services, electrical and general contractors, construction companies and many other business sectors that utilize fleet vehicles.
“How Can GPS Vehicle Tracking Improve Your Business?” will discuss the common problems confronting fleet owners and focus on how SMBs can effectively use GPS tracking to solve these issues. This white paper will describe the technical aspects of GPS tracking, provide real-world examples of how GPS vehicle tracking can be used in today’s business environment and help SMBs choose a GPS tracking solution to suit their unique business needs.
The Technical Aspects of GPS Tracking
Modern tracking devices for fleet and individual vehicles were initially conceived for the shipping industry. Companies with large shipping fleets needed to know the location of any vehicle at any time. From this need the idea of using GPS satellites to track and monitor fleet vehicles developed.
Generally, a GPS module is installed in each vehicle to track the vehicle’s precise location via satellite. The modules can also monitor a wide variety of vehicle information including speed, engine start up and shut down, routes and idling.
The information from each vehicle is then often transmitted to a remote user. Depending on the GPS fleet tracking system used, remote users can view maps of vehicle locations and routes or access available reports on vehicle status via the Internet or specialized software.
Business owners, fleet managers and dispatchers commonly use GPS fleet tracking to improve fleet routing and expedite dispatching. In addition, GPS can be used to monitor unwanted driver behavior, reduce fuel consumption, prevent theft and provide various operational efficiencies. Most businesses find a near immediate return against the cost of this type of tracking software.
GPS fleet tracking first gained wide-spread popularity in the European market and has emerged as an essential business tool in the United States. Once fleet owners install GPS tracking in their vehicles, they quickly discover how important the technology is in streamlining and improving their entire operation in ways never imagined.
You Simply Have No Control
Traditionally, fleet owners had no idea what went on outside their office walls when their employees drove off the lot. SMBs had no concrete or accurate way to measure job performance and accountability. There was no way to verify a driver’s location at any given time. Nor could owners ensure that employees only used vehicles for authorized uses.
Without the direct guidance of a supervisor, many employees are not as productive as they should be. The Global Productivity Report showed that 34 percent of employees’ time around the world is spent being unproductive while at work. A recent Gallup Poll found that employees spend about 75 minutes of every day being nonproductive. These numbers could easily be adjusted upwards for mobile employees.
Extended breaks, unauthorized side trips during business hours and inappropriate routing to job sites contribute to nonproductive time on the job. This lost time can also add up to increased payroll. When employees do something other than their job during business hours, they may have to work overtime in an effort to get all the work done.
In addition, the Wall Street Journal recently reported that SMBs with remote or unsupervised employees face an additional challenge. According to the Society for Human Resource Management, 59 percent of employees outside the office lie about the number of hours worked.
Additional Burdens of Running a Fleet
Lack of control over mobile assets bears additional financial burdens. Speeding uses more fuel than maintaining lower speeds. The Environmental Protection Agency (EPA) estimates that each 5 mph driven above the posted speed limit has the net effect of costing about 20 cents more per gallon of gas.
Excessive idling also adds significantly to the cost of doing business. According to the EPA, every hour of idle time burns 0.82 gallons of fuel. Contrary to popular belief, restarting an engine uses no more fuel than 30 seconds of idling and has very little harmful impact on vehicle components. When drivers use their vehicles as climate control, it costs businesses money.
Inefficient dispatching can also lead to considerable cost leakage. Without knowing the real location of every vehicle, dispatchers may not have the information to send the closest vehicle to a job site or provide direct routing information. Placing excessive phone calls to drivers to gain location and job status also adds to the amount of wasted time and cost.
Perhaps the biggest threat to a fleet owner is vehicle theft. Over 30 percent of stolen vehicles are never recovered. It often takes weeks or months to recover lost vehicles and most are returned with significant damage. In addition, any equipment and tools on board the vehicle are usually lost. Quick retrieval of a vehicle greatly increases the chance of reducing damage caused by thieves.
Fleet owners also have to worry about employees using company vehicles for unauthorized purposes. Many SMBs with fleets allow employees to drive vehicles home as a perk, but either prohibit or tightly restrict personal use. However, most owners have no idea whether or not their vehicles are actually being used for unauthorized purposes – even during work hours.
GPS Puts You in the Passenger Seat
If you were able to sit in the passenger seat of every one of your fleet vehicles, would your mobile employees change their unproductive and wasteful work habits? Research shows that they would.
A recent study by the Aberdeen Group (a research firm that studies the effects of technology on business) found that organizations experienced a 23 percent increase in the total number of service call completed per day per technician once GPS vehicle tracking was installed in their fleets.
Other findings from the study include:
- 12.2 percent increase in service profitability
- 14.8 percent reduction in average travel time per job
- 9.9 percent decrease in overtime pay
- 27.9 percent increase in operator compliance
- 13.2 percent reduction in fuel costs
Essentially, GPS vehicle tracking gives fleet owners the ability to ride with their mobile employees without ever leaving the office. When employees know that their driving habits are monitored, they comply more readily with cost-effective driving policies and increase productivity.
Dispatching and Routing Efficiencies
GPS fleet tracking also provides a tangible benefit through improved dispatching. When dispatchers know the exact location of company vehicles, they can more effectively dispatch the vehicle closest to any job site. In addition to saving fuel and reducing phone calls to drivers in the field, this can also increase customer satisfaction through vastly improved response times.
This goes hand in hand with routing efficiencies. By watching vehicles en route, dispatchers can make sure drivers take the most direct route to any job site. In addition, should a driver get lost, you can easily get them back on the correct route. Some GPS tracking solutions even include current traffic information, so drivers can be routed around traffic congestions, further improving response times.
In addition, many tracking solutions offer present-time and archival routing information so owners know where their drivers have travelled and where they are heading. By combining location- and time-based information, fleet owners can track the exact number of hours to charge customers and verify employee hours worked.
GPS tracking can provide information on when an employee starts a vehicle, when he arrives or leaves a job site, and when the vehicle is shut off. Fleet owners will know exactly how much and how long the employee worked at each site and how long they worked during the entire day.
Some GPS systems can also incorporate time/billing information into back office applications to automate payroll. By eliminating manual time sheets, fleet owners save considerable time in back office productivity. In addition, automated payroll often translates into more accurate billing and fewer overtime hours.
Another huge benefit of GPS tracking is the ability to recognize any unauthorized usage. This includes unauthorized usage by employees, as well as protection from theft. If a vehicle is used during unauthorized times, business owners will know it. Should a vehicle be stolen, the GPS tracking unit will show the vehicle’s exact location. This considerably improves retrieval times and reduces the amount of damage a vehicle may experience while stolen. For businesses with vehicle fleets, the ability to track and ensure retrieval of stolen property remains paramount.
Other Effective Uses of GPS
GPS vehicle tracking can provide SMBs with a vast amount of information that can be used to achieve further benefits.
Installing a GPS vehicle tracking system is the perfect time to consider implementing or revising company driver policy. Policy should include guidelines of vehicle speed, idling and unauthorized use of company vehicles. GPS tracking can then help SMBs enforce policies to eliminate wasteful driving habits.
A reputable GPS tracking solution should include easy-to-use reporting functions to help fleet owners make business decisions based on the data. Fleet owners may receive information about vehicle speeds, idle times, engine start-up and shut-down, and notifications when vehicles enter or exit specific sites. With information in hand, owners can identify which drivers properly follow driving procedures and which need additional counseling.
Many SMBs find it extremely useful to use the information gathered from GPS as a way to implement a positive bonus program. Drivers that do not violate driving procedures, as proved by the GPS system, are entitled to bonuses. Since driving behavior directly affects fleet costs, companies can provide bonuses while still increasing revenue.
Case Study: GPS Vehicle Tracking in Action
Ingersoll Rand Climate Control Technologies provides HVAC-R services to customers in North Carolina, South Carolina, Virginia, Georgia, Maryland and Tennessee. The company recently renewed their commitment to GPS by re-signing with FleetMatics, a leading GPS fleet tracking provider.
According to Brian Saunders, Territory Fleet Administrator of Ingersoll Rand, his company found a variety of ways to utilize GPS tracking on 100 of their vehicles to achieve significant financial rewards. By utilizing location-based tracking, Mr. Saunders ensures that drivers use the most direct routes to job sites. Dispatchers also have the ability to locate the vehicles nearest to any job site, thus further cutting fuel usage.
In addition, idling reports show which drivers waste fuel by running their vehicles as climate control during hot or cold days. Ingersoll Rand effectively reduced idling times to just 10 minutes per vehicle per day. In addition, speeding alerts have helped improve safety and saved fuel. When a driver exceeds the speed threshold set by Mr. Saunders, he gets an automated alert.
“In one year, we saved $85,000 in fuel costs alone,” said Mr. Saunders. “We implemented the system right before fuel prices spiked. It made us look like geniuses.”
Mr. Saunders also uses the GPS system to verify payroll. Ingersoll Rand found they were losing money because some employees were providing false information regarding how long they spent at a job site. With GPS, Mr. Saunders found that some employees were charging the company an additional three to four hours per week.
“What we do is randomly pick five guys every week to audit,” said Mr. Saunders. “This helps us ensure employees are doing what’s expected of them and that they get all the pay they deserve. We have improved payroll accuracy and significantly reduced overtime while better meeting the demands of our customers.”
Dispatchers at Ingersoll Rand can now respond quickly to service calls and exceed customer expectations. In addition, if a driver gets lost or stuck in traffic, dispatchers have the ability to find the fastest route to the next job site.
“We used to have territories for drivers in an attempt to keep response times low,” said Mr. Saunders. “With GPS, we don’t have to worry about territories. We just dispatch the person we know can get there first.”
The system even helped Ingersoll Rand eliminate employee theft. Used copper from any job is supposed to come back to the company. Mr. Saunders set “point of interest” alerts on all the scrap yards in the area and found that some employees were turning in the copper for their own personal profit.
Ingersoll Rand achieved results beyond what they expected and has remained competitive in a volatile market.
“Now I don’t have to worry about fuel expenses and all the other issues we had,” said Mr. Saunders. “I just wanted a solution to my problems and GPS was the answer.”
Choosing the Right GPS Solution
There are literally hundreds of GPS vehicle tracking suppliers on the market, making it difficult to choose which system will work best for each business. The key is to find a company that delivers a GPS solution that contains in-depth reporting, ease of use, reliable connectivity and excellent customer service.
In-depth reporting features provide SMB owners with the data needed to make sound business decisions regarding their fleet vehicles and drivers. In addition, accurate reporting of speed, vehicle usage, idle times, and start-up and shut-down can be utilized as part of an employee reward program to encourage fuel-efficient and safe driving habits.
Many companies create GPS solutions from a technical viewpoint without considering the usability of the system. Companies that understand the needs of SMBs and have extensive experience in serving the SMB market can greatly enhance the results of a GPS solution.
Another consideration is system uptime. Be sure to ask any prospective GPS company how often their system is online and how often they experience disconnections.
Finally, customer service should be a major consideration when choosing a GPS solution. With the growth of demand in GPS tracking, flimsy companies have sprouted up offering discounted services with poor-quality systems and even poorer customer service. Reputable GPS companies will be responsive to customer service, technical and training requests. In fact, the best GPS companies provide these services at no additional costs to their customers.
GPS Buyer’s Checklist
This GPS buyer’s checklist provides fleet owners with additional questions to ask when choosing the right GPS solution:
- Is the GPS tracking unit exposed or hidden from view?
- Does the software provide accurate, easy-to-read reports?
- Can you replay journeys minute by minute?
- Are there any other costs for service after the sale?
- Are there restrictions to the number of users that can access the system?
- And always ask to see the system working on a live fleet.
GPS tracking has initiated a complete paradigm shift in the way SMBs with vehicle fleets manage their business. GPS fleet tracking technology is not the wave of the future. It is already here and being used effectively in a number of SMBs looking to increase revenues while decreasing costs. The benefits and uses of GPS tracking filter throughout an entire organization, from mobile employees and dispatching, to customer service and accounting.
Research continues to show that SMBs that do not utilize GPS tracking are losing profit due to inefficiencies, lost productivity, poor cost controls and outright theft. In today’s economic climate and competitive landscape, it is more important than ever for owners to do everything possible to keep ahead of the competition. By not installing a reputable GPS tracking system, owners may be putting their vehicles, employees and businesses at unneeded risk.
FleetMatics is a software provider of GPS-based fleet management systems. FleetMatics’ comprehensive offerings are designed for businesses of all sizes that focus on improving customer service, real-time operations visibility and maximum performance from their vehicles and service representatives. Our software is used by over 11,000 customers globally, tracking over 120,000 vehicles.