A fleet operation is inefficient whenever vehicle capacity goes unused, when vehicles put on more miles than necessary to accomplish the work at hand and when drivers sit at the wheel instead of serving customer needs because of inefficient scheduling. Here are five warning signs of fleet inefficiency that can also point to cost savings and improvement opportunities.
1. Partially-empty vehicles
Go out on your docks tomorrow morning and take a good look inside the trucks for the empty space still available when they are ready to leave the facility.
In many companies, fleet routes do not change along with fluctuations in order volumes because it’s just too hard to manually re-route all vehicles in a timely fashion. If routes are not frequently adapted to order realities, the results are wasted miles and under-utilized fleet equipment. Unused capacity of 10-25% is commonly observed in manually-routed fleets.
2. Heavy phone communication
Do you notice a high volume of phone calls between your drivers, customer service staff and customers? Do your dispatch operations often seem chaotic with so many phone calls? This chaos is usually a reaction to less-than-ideal fleet routing control, inaccurate route schedules and a lack of real-time fleet visibility. Phone calls are the only way for your staff and fleet to compensate for these inefficiencies throughout the day.
3. Inaccurate route schedules
How often do your drivers arrive at customer locations 45 minutes or more ahead of or behind the planned schedule? Do your route schedules incorporate accurate travel and service times that reflect the current season and driving environment, as well as customer service windows?
Your dispatchers will make their best efforts to estimate drive times and unloading times quickly while sorting through what could be hundreds of delivery tickets. If their best estimate is off by only 10% for an 8-hour route, this means a lag time of 48 minutes is already built into the schedule. Route execution can be disrupted further by arriving at locations off-schedule to find that customers aren’t prepared to receive drivers.
4. Large disparities in planned vs. actual
A big difference in the route miles and hours that were planned when compared to actual driver performance indicates problems with accurate scheduling, basic driving assumptions, poor mileage estimates and possibly driver performance issues. These questions will help you pinpoint root causes:
- How accurate are planned vs. actual drive times?
- Are there frequent unplanned stops and breaks within routes?
- Is accurate driver performance reporting available?
- How accurate are the unloading time estimates used in planning?
- How many out-of-route miles have been identified?
- Are there excessive wait times at certain customer locations?
5. Limited predictive planning ability
How long would it take your fleet operations to estimate the operating cost impact of a planned or unplanned change in your distribution volumes, schedules or geography? What effect will servicing a larger territory or a major new account really have on your operations profitability?
A technology solution that addresses many fleet problems
Route optimization technology—also known as routing and scheduling software—is a widely available and increasingly affordable solution for many of the problems mentioned here. Fleets that run dynamic or even primarily fixed routes can benefit from optimization tools in multiple ways. Planners can more appropriately size the fleet in use, based on order fluctuations and overall business trends. Branch personnel can use the tools daily to handle route and schedule adjustments due to order and volume changes. Strategically and tactically, routing and optimization tools help companies maximize the productivity of their valuable fleet resources, while reducing operating costs.
You can extend the value of better route planning by using web-based, GPS fleet location reporting and automated exception alerts. Tracking vehicles according to their planned route status helps reduce that dispatch chaos. Web reporting makes it easy to offer track-and-trace services online for your customers and reduce phone calls. Proactively identify potential service failures to stay on top of customer satisfaction issues.
Looking at stop-by-stop route performance details, map overlays of planned and actual driven routes along with account-level location data, it’s fairly easy to identify the main causes for planned vs. actual discrepancies. Work with your customers to develop more realistic unloading or service times that result in more efficient schedules and a better service experience.
Routing tools are more flexible and accessible modeling platforms than spreadsheets to answer what-if questions like these:
- Is it more cost effective to incorporate a drop-and-hook location for another market, or to dispatch all trucks from one depot?
- How many miles could be saved if certain customers allowed delivery to be scheduled 15 minutes earlier or later?
- What’s the right number of vehicles and drivers needed to serve that 200-store chain whose business you are bidding on?
The dynamic nature of business in uncertain economic times means that opportunities to reduce costs or win new customers may appear frequently but disappear just as quickly. Only data-nimble companies, with true understanding of their operating costs, service capacities and the tools for what-if analysis, will be able to make the right business decisions in the right time frame to keep ahead of the competition.
James Stevenson is Vice President of Sales and Operations for the Appian software business unit of TMW Systems, a leading provider of logistics software solutions for the transportation industry. He has over 23 years of experience in the transportation industry and the application of logistics planning, routing and scheduling technologies. A native of Oklahoma City, James attended the University of Oklahoma, where he received a BS in Industrial Engineering with a concentration in Operations Research.