In this post I will share my experience on the issue of fleet fuel calculation and control. This topic might be more relevant to companies such as bus carriers (public transport), truck carriers (logistic), and some other companies with their own fleet.
I came up with a question – where does the fuel of the company go – after I noticed it on a home page of a telematics’ equipment manufacturer. Indeed, can all the fleet managers state with their hands put on their hearts that they know the answer to this question? And, do they have the tools for analysis of this data and for effective decision making?
Certainly you all have heard of a thing called GPS fleet tracking. There are many companies that offer full range of services for the fields of business I mentioned previously. You might have heard of companies like MiX Telematics, SCOUT GPS, Intelligent Systems etc. Not long ago I came across the field of telematics, and it was a novelty for me that there is something more to the range of their services than simply showing the position of an equipment on the map. Basically, the additional functions are:
- gauging the fuel in the tank and analysing the gathered data. It may be carried out both with via methods provided by the vehicle manufacturer, and via fitted additional devices,
- routing. There is an option to plan the routes on an electronic map,
- determining the driving style of a driver. There is an option to analyse the occasions of breaking the speed limit, dynamics, and to reveal aggressive drivers.
Interesting, isn’t it? However, in my opinion, these systems do not deliver the desirable result without them being used in tandem with an enterprise resource planning (ERP) system. To get the best results, it is important to collect information on:
- vehicles and its technical condition,
- vehicle drivers and relevant information about them,
- waybills (routes, planned fuel consumption)
- planned maintenance works
In the end you can get a completely different result by connecting a telematics system to your enterprise resource planning system! However, a fantastic effect can be obtained also without telematics systems.
A few years ago my team implemented Elva DMS to a public transport company. The company has a fleet of more than 200 units and their own staff of bus drivers. One of the tasks in this project was to introduce a waybill and fuel management module. The system had to record the routes, rides, to calculate the planned fuel consumption and register the real fuel use. It was not supposed to use any specific solutions such as electronic reading of the remaining fuel quantity in the tank for the calculation of the real fuel use. But the control needed to be made analogously.
„We have gained greater transparency of the company data and greater control over the resources, which allows to take actions effectively. As the result we managed to reduce the company’s fuel cost by 10%. This reduction allowed for a very fast investment return. The financial benefit of the first year exceeded the investment in the implementation of Elva DMS system.” – said Anda Maurīte, CFO, CATA.
And this is the solution my team came up with. From the viewpoint of data calculation, all the necessary estimations were carried out, including even the rather complicated planned fuel consumption calculation. However, to ascertain the fuel consumption an old and approved method was applied.
Each morning the bus leaves the main station with a full tank. And, when the bus driver returns in the evening, he must refill the tank and register filled amount in the waybill. This delta – which is considered to be the representation of the real fuel consumption – is being registered in the system. Later the result is being analysed and compared to the planned fuel consumption. Thus the enterprise executives have the access to reliable information to perform data analysis and make decisions.
This solution may not fit all enterprises simply due to technical reasons. For instance – there is no fuel station near the fleet park. But that, however is a completely different topic. I want to add that in the case of CATA the implementation of Elva DMS required major initiative from the executives of the company. And the result was positive.
It is undeniable that Elva DMS or any other automotive ERP system alone, without involvement from management, will not improve your business processes. I would encourage you to view it as a powerful business tool, which, combined with third party system, allows you to make the business more effective and profitable.
Please, let me know if you have any questions about practical aspects of this solution.