There are so many variables to consider when operating a fleet. Ideally, you can optimize all of them to 100% efficiency. The reality is that there is not enough time or resources to optimize everything 100%. In reality, you need to figure out what the biggest cost centers are and optimize the areas that have the biggest potential for greater profit.
There are two forms of fleet optimizations.
- Cost Savings
- Complete More Jobs
Operating a mobile fleet, you will notice the biggest costs are usually: labor, fuel, and vehicle maintenance. There are simple fixes for each
Complete More Jobs
A lot is spoken about how to save costs because it is usually easier to save.
All business owners know how true a statement “A penny saved is a penny earned”. But what if I told you that you can make more money without worrying about the fuel and labor costs. Let’s say each hour that a driver spends at a customer’s site brings in $200/hour for the company. If we find a way for each driver to do one extra job per week, or 4 extra jobs per month, the company will generate $1000 more per month.
Now would it matter if the fuel cost was the same or even higher than previous months? It is highly unlikely that we will spend $1000 more in fuel and labor combined. By taking an offensive approach to our business, we can make more money for the company even though our fuel and labor costs could be higher.
The only way to accomplish this immediately would be to optimally plan out our routes for drivers. An optimized route will minimize time driving and maximize time on job sites, thus increasing our company revenue. When companies are determining if route optimization software is worth it, they need to consider the numbers.
Let’s say your route optimization software costs $50/driver per month. By implementing the software, the driver will be able to do on average, an extra $1000 in revenue per month. The return on investment is astronomical, 1900% ROI in one month! There is investment that can provide a 1900% ROI month after month. Companies that don’t invest in route optimization software are doing themselves a huge disservice. Small or big fleets all benefit from optimizing their routes daily.
Route optimization software should be considered an investment with a guaranteed ROI, it’s not a cost center. Rather it is an investment that is highly likely to pay off if implemented and utilized properly.
The highest priority item should be to complete more jobs by utilizing route optimization software. Then implementing systems to reduce fuel and accurately track payroll hours. Software has made all of this possible and these solutions are easily accessible. Search out the right software solutions for your company that will: optimize routes, track fuel consumption, and track payroll hours. As a business owner/fleet manager, it is your job to maximize revenue and minimize potential inefficiencies from your mobile fleet.