FleetWatch Online - 37-Managing the Interface

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June 2006

Fleet Management is essentially about managing overall risk in an operation.

Allen Harrington

Behind all technology-based solutions is a truckload of mental grind. A common pitfall for end-users is the notion that the technology product is going to do all the work for them. This is an especially costly error when it comes to fleet management. Getting business managers to conceive and implement people-management strategies that work with information technology-based tools is crucial if real cost benefits are to be derived from both human and technology resources. Paul Collings spoke to three leading Fleet Management System suppliers to find out how they go about enhancing the human/technology interface.

Hein Crocker, managing director of Orbtech Tracking, is an ex-police detective and an expert in "thinking like a criminal", says his chairman, Orbtech's Allen Harington: "Hein joined Orbtech two years ago after achieving remarkable success in truck fleets with his anti fuel fraud solution called Dreamworks. We share the same ideas on how fleet management is essentially about managing overall risk in an operation, both on and off-road. Together we have developed a management approach called 'Total Control', a combination of strategic risk management methodologies and technology tools that together cut operational expenses and enhance efficiency."

Orbtech’s Hein Crocker is an ex police detective and is an expert in "Thinking like a criminal’.

Quantifying to manage better
Both Crocker and Harington agree that no one has hitherto quantified the risk component in the transport industry. "When you clearly identify the elements involved in the total operational sphere of a truck transport fleet and define the potential risks inherent to each element, you begin to get a picture of the operation's overall risk profile. From here, one can quantify Incident Cost per Kilometre (ICPK) and the cost impact of risk on the operation. It's the old saying again: 'you can't manage what you can't measure'," says Crocker.

The 'coal-face' experience Crocker has gained over the years gives him a solid understanding of where the dangers and threats lie in any given transport application, knowledge he passes on to his clients: "Transport company owners generally are unaware of what their drivers get up to once they drive out the depot in the truck. Unless strictly-managed policies and procedures are in place, abuse will occur."

The process of implementing a 'Total Control' system begins, says Harington, "at boardroom level. Once top management has embraced the concept, we start with a risk analysis of the entire operation, followed by the implementation of both technology and manually-based systems that directly address risk management in management-defined areas. We then train operations managers to become risk controllers, using an array of checks and balances of which technology-based systems are one component. The objective ultimately, is to implement savings on running costs and enhance profit-making structures."

Grooming the 'jockey'
This philosophy of driving costs down while simultaneously improving a fleet's capacity to earn revenue is shared by Observer Technologies' managing director, Doug Repton: "The playing field as far as technological capability from system to system is concerned is pretty level," he says. "The difference between Fleet Management providers is the degree to which they educate and support their clients."

Doug Repton and Marihette Hattingh of Observer Technologies

Observer Technologies is the owner of Fleet Management products sold off by Denel in 2002. "We also bought the development team so the technological know-how has remained in-house," explains Repton. "Our software is modular and therefore scaleable. This enables us to offer customized Fleet Management Systems at affordable rates. Cash flow is generally a critical issue in road transport and the fact that our system can be leased means our clients can realize cost benefits without making serious dents in their budget."

Repton believes the key success driver behind a Fleet Management System is the 'operations manager', that middle management individual charged with the hands-on running of the business: managing vehicles, drivers, technicians, client requests, suppliers and his/her own management. "Finding this 'jockey' is crucial to the successful implementation of an FM system. Our first step is to engage the 'jockey' first and design a system that serves his immediate needs. Once we have his buy-in, he joins us in the boardroom where we sell the concept to management. From this point, the system can be expanded to incorporate functionality that serves high level management objectives."

Marihette Hattingh, account executive at Observer Technologies says that no two clients are the same and therefore, a very close relationship needs to be cultivated between her and the system operators and managers she serves. "Being on call to assist wherever necessary is part of our service. Whether it's training or locating a client's vehicle remotely, we become partners with our clients to ensure full value is derived from our system."

With some 20 000 vehicles under its 'technological eye', Observer Technologies has consistently achieved fuel savings of 7.7% across its client base. "With the system being properly managed, drivers are better managed. They're more disciplined and the information generated by the system can help build incentive structures that further motivate drivers to perform better," says Repton.

Slicker city management
The City of Johannesburg (COJ) has over 3000 vehicles fitted with Control Instruments (CI) OmniBridge's FM Communicator on-board computer. These vehicles are owned by fleet management company Fleet Africa (a Supergroup subsidiary): "We offer a full-maintenance leasing product to the City of Johannesburg, and, as such, require a system that can accurately measure the kilometres travelled so we can bill the customer accordingly. Not only does CI OmniBridge's product satisfy our kilometre-driven requirements, it also offers more value-added information," says Len Eicker, commercial director of Fleet Africa.

The Fleet Africa crew with Julian Burns-Thomson (left)

With three large organisations (COJ, CI Omnibridge, Fleet Africa) constituting a relationship that commenced in 2001 when Fleet Africa won the COJ tender (again in Feb 2006) to manage its vehicle fleet, it's a rather complex melange of management objectives and liabilities. "Fleet Africa with CI Omnibridge is responsible for improving vehicle availability, which means ensuring vehicles are properly maintained. The job of improving vehicle efficiency belongs to the COJ, who employ the drivers," explains Eiker.

This state of affairs does not allow for 'seamless' management and Eiker points out that the Fleet Africa/CI Omnibridge mandate is to provide COJ management with reports and vehicle 'intelligence' which COJ management can utilize to improve the way its utility vehicles are used (its trucks comprise mostly 3.5 - 8 ton rigids and 6x4 waste compacters. Other vehicles include Metro Police vehicles, ambulances, motorbikes and tractors): "The system provides exception reports on driver-related issues such as speeding, harsh braking, and route deviation. This tool provides us with real-time information so that we can identify and address vehicle abuse as and when it occurs. This is of particular benefit to our organisation, as we share the risk that the City of Johannesburg has outsourced with Control Instruments through a back to back service level agreement."

Overcoming the obstacles imposed by the 'management divide' inherent to the contract in order to ensure that real value is derived from the system entails the identification and upskilling of 'fleet managers' within the COJ workforce, explains Julian Burnes-Thomson, regional sales manager, CI Omnibridge: "We train COJ fleet managers and transport officers with specific goals in mind. We have a mandate to teach them the system's capabilities, what they can expect it to deliver and how VMT (Vehicle Management technology) works. How they use the reports and other information our system delivers does not fall within the parameters of our contractual obligation but we do ensure that the COJ fleet managers properly understand exactly how the system can help improve efficiencies."

The overriding vision, it seems, is to make the system as tamper-proof as possible while generating as much driver and vehicle related information in easy-to-understand reports that help the COJ fleet perform better. "Approximately 2,500 driver identification tags have been issued," Eiker says. "These tags are an extremely effective means of determining who was driving a particular vehicle at a certain time. Like a normal immobiliser plug, the tag needs to be inserted by the driver before the engine will start, and immediately calls up his or her particulars. We also provide our clients with reports on an ongoing basis. Monthly logbook recordings, including kilometres travelled, are also supplied. Certain exception reports will be communicated to our clients via email or sms as and when they occur."

The fact that Fleet Africa and CI Omnibridge have succeeded in improving vehicle availability in the COJ fleet from 60% in 2001 to 90% today means they're certainly driving the system properly, engaging the necessary management mindsets to derive improved value.

Driver-smart - That ID tag goes in that hole

Bottom line
As Harington says, "Managing a fleet effectively is about reducing risk. The core purpose of Fleet Management technology is to improve bottom line performance, to create wealth." He also estimates that on average, most fleet managers get calls from FM system sales people at least four times a day. With a hit rate like this, today's fleet managers are getting a pretty good picture of what's available as far as FM technology is concerned. If they're equipped with the right sort of management policy that integrates people management with system capabilities, you can rest assured they're going to be real choosy when it comes to implementing a system that serves their specific needs.