Tracking the utilization of your assets is an important part of fleet management. The reason is simple: Underutilized assets ultimately cost your company money.
It’s easy enough to manage a fleet when you only have a few vehicles. But things get more complicated as you add more powered and non-powered assets to your inventory.
So how can you efficiently manage assets across your fleet? How can you maximize utilization and get more out of assets like trucks, trailers, and equipment?
In this article, we’ll explain fleet asset management and how it can streamline your operations. We’ll also look at how the CalAmp Application can help.
What is fleet asset management?
Fleet asset management is the process of managing the different assets in your fleet. It covers each stage of an asset’s lifecycle, from procurement and deployment to maintenance and eventual disposal.
Proper fleet asset management helps your company make the most of its assets, particularly those that contribute to your bottom line. The most valuable powered and non-powered assets for your fleet may include the following:
- Scissor lifts
- Waste bins
Tracking the life cycle of these assets can help you increase their lifespan and maximize productivity. The five stages of the asset life cycle are:
- Planning: In the first stage of the asset life cycle, companies identify what assets they need and how they will use them to meet organizational goals.
- Acquisition: The second stage involves acquiring an asset. It involves speaking with multiple vendors, negotiating contracts, and getting purchases delivered on time.
- Operation: The third stage is all about utilization. Once an asset is delivered and installed in your facility (if necessary), it’s ready for your team to use. You’ll need to ensure your teams can safely and efficiently operate the asset.
- Maintenance: The fourth stage outlines what maintenance is required for each asset and when it will be performed. This stage is important to keep assets in good condition.
- Decommission: The final stage, decommission, involves properly disposing of assets that have reached the end of their useful life.
How you manage and utilize each asset has a direct impact on profitability. In the next section, we’ll examine why effective asset management must be a top priority.
Why is fleet asset management important?
Assets like trucks and generators are a significant investment for any fleet. However, poor management can reduce productivity and increase the risk of downtime.
Here’s a look at the benefits of fleet asset management. We’ll also look at how solutions like CalAmp can help.
Maximize asset utilization
Increasing fleet utilization allows you to boost productivity with fewer resources. But without data that shows how your assets are used, you won’t be able to optimize utilization effectively.
Fleet asset management solutions like CalAmp enable you to monitor asset utilization across your fleet.
These metrics can inform decision-making processes. For example, if an asset is underutilized, you can sell or transfer it to another facility that may need it more. Likewise, if an asset is overutilized, you’ll have the data to support investments into more resources.
Streamline fleet maintenance
The average service truck brings about $30,000 in revenue each month. However, unscheduled downtime due to equipment failure can put these profits at risk.
With a fleet asset management solution, you can keep track of vehicle repairs and view upcoming service schedules. This can help you streamline fleet maintenance and reduce the risk of costly breakdowns.
You can also see when services are scheduled next, so you can schedule maintenance and minimize downtime. Proper maintenance can prolong the lifespan of your assets and get more value out of each.
Reduce operational costs
Aging assets can cost more to maintain than they’re worth, which can put a dent in your profits each time you service them. But how do you know when to replace an asset?
Fleet asset management software provides extensive service histories for all assets, allowing you to determine how much each cost to maintain. This can help you determine when you should replace an asset.
Combined with a telematics solution, you can find more ways to reduce costs. Examples include gaining insights into fuel consumption and coaching drivers to conserve fuel.
Safeguard against theft
Certain assets can easily cost tens of thousands of dollars on the used market, making them attractive targets for opportunistic thieves.
With fleet asset management software, you can create geofences for assets like trucks and trailers and receive alerts if they leave designated areas. This allows you to keep tabs on your assets even after business hours.
Ensure regulatory compliance
There are certain regulations you must follow if you operate a fleet. Failure to comply with these regulations can result in heavy penalties and put your drivers out of service.
Fleet asset management systems like CalAmp work with electronic logging devices (ELDs) that ensure drivers comply with Hours Of Service (HOS) regulations. What’s more, you’ll have complete records of vehicle inspections and maintenance schedules to prove compliance.
In the next section, we’ll look at how you can put together a fleet asset management plan — a detailed document to help you better manage your assets.
Components of a fleet asset management plan
A fleet asset management plan can make your fleet more efficient and reduce downtime. These plans typically include the following components.
An inventory of all your assets is a key component of a fleet asset management plan. It includes information about all assets, such as their make, model, and condition.
Create a list of all the assets in your fleet. Include details like make, model, and manufacturing year. Use a spreadsheet to compile this information. Alternatively, you can use solutions like CalAmp to keep track of your assets.
Next, determine the age and condition of each asset. This may involve reviewing maintenance records or performing physical inspections. Be sure to include all relevant information and observations with your notes.
By creating a comprehensive asset inventory, fleet managers can understand the available assets and their current status. They can also anticipate when assets must be replaced and budget for future expenses accordingly.
There are two types of maintenance: reactive and preventive.
Reactive maintenance is any work you perform after an asset breaks down. In contrast, preventive maintenance is where you schedule maintenance tasks based on odometer readings or engine hours. With a preventive maintenance schedule, you can extend the lifespan of your assets and prevent unexpected breakdowns.
Create an asset inventory if you haven’t already, and record service histories. Then create a schedule of the recommended maintenance tasks and intervals for each asset (refer to the owner’s manual for this step). This will help you plan for any downtime.
Preventative maintenance ensures that your assets are well maintained. But manually tracking maintenance schedules for each vehicle is time-consuming. Fleet asset management solutions like CalAmp can automate maintenance based on mileage or engine hours and alert fleet managers when a vehicle is due for service.
Assets don’t last forever.
At a certain point, the cost of repairing an asset may outweigh the cost of replacing it. Every fleet asset management plan should include replacement schedules. This enables fleet managers to plan for future expenses and ensure there are enough funds to replace an asset.
Determine the expected useful life of all assets and consider their current age and condition. Then create a replacement schedule for each asset. For example, the average lifespan of a heavy truck is 14.2 years. If a truck in your fleet is eight years old, you can expect to drive it another six years before you need to replace it.
Keep in mind that replacement schedules are estimates. You may need to replace certain assets faster, depending on how much you use them. Consider different options for removing and disposing of assets.
Every fleet operates with some degree of risk. While you can’t eliminate risks, you can develop and implement strategies to mitigate their impact.
Identify potential risks for each asset. Examples can include equipment failure, theft, and property damage. Use a risk assessment matrix to visualize the likelihood and severity of each risk. This will help you determine which risks to prioritize.
Next, develop strategies to mitigate the impact of each potential risk. Examples may include implementing new policies, purchasing equipment like telematics devices, or providing additional training to your drivers.
Creating a budget is a must for a fleet asset management plan. It ensures you have enough set aside to cover asset-related expenses, which may include:
Identify all costs associated with an asset. Then determine the frequency and cost of each expense over a given period, such as a quarter or a year. Review records (if available) for more accurate estimates.
Look for areas in your budget where you can reduce costs. For example, if fuel is one of your biggest expenses, you might invest in a trucking telematics solution to plan more efficient routes and encourage drivers to reduce their idling.
Performance metrics can help fleet managers evaluate the effectiveness of their fleet and find ways to improve efficiency. Identify key performance indicators (KPIs) that are relevant to the fleet. Some examples include vehicle downtime, maintenance costs, and fuel usage.
Next, collect data for each KPI and establish a baseline. This will enable fleet managers to assess the impact (if any) of any changes they make. For example, if new policies around driving behaviors reduce fuel consumption, they can make those changes permanent.
Policies for acquiring and disposing of assets
Fleet asset management plans should have clear policies for acquiring and disposing of assets.
Outline each step of the acquisition process and determine who’s responsible for evaluating the purchase. This process may also require approvals from senior management, depending on the asset. Likewise, establish procedures for how an asset will be disposed of.
Get the most out of your assets
If you operate a fleet, you know how important it is to keep your assets in top condition. But how do you monitor utilization? How can you streamline maintenance and improve safety?
A fleet asset management solution like CalAmp can help.
Our platform lets you unify your telematics data in location, allowing you to track and monitor your assets in real-time. It can also help you automate maintenance, ensure compliance, and boost efficiency.
Request a demo today to see how CalAmp can help you manage and get more value out of your assets.