As much as it’s affecting the shopper experience inside the grocery store, technology is influencing the way products reach the supermarket.
To be sure, all points along the supply chain are being honed by the influence of digital, and fleet management is no exception.
“Technology is driving rapid change in fleet management and is impacting the competitive landscape in the areas of data analysis and equipment specifications,” says John Flynn, CEO of Fort Lauderdale, Fla.-based Fleet Advantage.
The company’s philosophy of economic obsolescence posits that it’s much more efficient and cost-effective to run trucks until it becomes cheaper to get a new truck than to operate an old one, rather than trying to extend vehicles’ working lives by operating trucks until they become functionally obsolete.
“We are finding that the ‘tipping point’ occurs between 36 and 42 months of service in vehicles traveling an average of 80,000 to 120,000 miles per year,” Flynn notes.
In the future, by focusing on economic obsolescence, he asserts, companies can implement a continuous improvement model — enhancing efficiency, lowering costs and providing environmental leadership via reduced greenhouse gas emissions.
To that end, Fleet Advantage has developed systems and software that capture information in a structured format and allow fleet operators to calculate their total cost of ownership, giving them the tools to identify and capture cost savings opportunities.
Likewise, Miami-based Ryder has a total cost of ownership (TCO) model that provides a tool for identifying all financial costs, which is quite often the most difficult challenge for fleet owners.
“With major emissions changes on the horizon in 2017, and more to come in the future, it’s crucial that systems be built for the long haul, run more nimbly and be capable of responding quickly to changing consumer demands,” says John Deris, Ryder’s SVP of national sales.
According to Deris, companies are going to be forced to tweak strategies to address fleet aging, complex technology changes, and the training of technicians and drivers. This includes considering outsourced providers such as Ryder to help them address these critical issues.
The Logistics of Logistics
Atlanta-based Manhattan Associates has a Transportation Management Solution that helps fleets address business challenges such as modeling optimal store delivery schedules, determining which stores should be serviced by private fleet versus common carrier, and planning and executing store delivery routes.
“We see a lot of interest from our customers in how they maximize the utilization of their fleet, and how they handle new rules, guidelines and legislation around drive time,” says Scott Fenwick, senior director at Manhattan Associates. “There is a shrinking pool of available drivers — and the pool isn’t getting any deeper. Grocery chains are hard-pressed to work through how they can better utilize the drivers they have, and how to do so in the most efficient manner possible.”
Fenwick adds that Big Data and analytical tools will play a greater role in fleet management. “Grocers want to focus on how they model and design their networks to more efficiently use their fleet,” he says. “Analytical tools will help focus on how to build these networks and how to get more visibility into these networks to turn that data into actionable insight.”
Paola Bennett, manager of business consulting at Sparks, Md.-based Element Fleet Management, calls it “an exciting time” for fleet management. “With technology continuing to advance rapidly, and with increased government legislation in areas of safety, alternative fuels and clean air,” says Bennett, “the responsibilities of fleet management companies and their clients grow.”
Bennett sees as remaining challenges determining which economic trends will influence fleet operating costs, fleet safety and sustainability. “Another challenge,” she adds, “is fully utilizing tools like telematics [wireless communication networks] and predictive analytics.”
Bennett’s vision of fleet management’s future includes such high-tech innovations as driverless vehicles, for which telematics will be essential. Software will eventually be available to analyze each vehicle’s location during the day and recommend fuel stations with the best prices, she says. “We may even see a shift in the appearance of gas stations, including having CNG [compressed natural gas] and charging stations for electric vehicles readily available,” she adds. “Software will also be available to direct vehicles to maintenance shops and automatically send a driverless vehicle to be serviced.”
Atlanta-based NexTraq offers a system that helps vendor fleets provide efficient and timely delivery with dispatch and routing, as well as monitoring the temperature of the product from door to door.
Mark Huffman, NexTraq’s senior director of business development, says operators that use technology to give them total fleet control and visibility will be competitive and grow, while others that are “late to the game” might have more difficulty growing their business and keeping up with increased government regulations and vehicle safety.
“The future will bring more government regulations and new technology to delivery and distribution fleets,” declares Huffman. “There will be more automotive technology coming to commercial fleets, both from the truck manufacturers and aftermarket providers, with items like cameras at every corner, lane departure sensors, stability control and enhanced navigation technology, all helping give fleet managers a higher level of manageability and control of their fleets.”
With a growing shortage of qualified drivers, fleet managers are placing more emphasis on driver safety.
“A collision that results in a delayed or damaged delivery can be costly, especially when higher insurance costs are factored in, not to mention the potential harm it can cause to customer and partner relations,” says Adam Kahn, senior director of product marketing at San Diego-based SmartDrive Systems.
SmartDrive Safety, explains Kahn, is a video-based driving-safety program that helps eliminate the risky driving that increases collision frequency and severity, drives up costs, and negatively impacts the overall safety performance of fleets.
“We see the future of fleet management moving toward more actionable data and video technology,” he says. “In grocery distribution, there has been an increased focus on the use of video to provide deeper insight into the risk and ‘absolute truth’ of an event, along with a platform approach to working collaboratively to reduce risky driving performance.”
With driver demand at an all-time high, he notes, fleets are looking for new ways to motivate and retain drivers. Video-based safety programs facilitate a team relationship between fleet managers and drivers by providing reviewable, coachable events that highlight good driving skills and that can focus the discussion on improvement instead of debate and argument.
Dallas-based Paragon Software Systems offers routing and scheduling software for planning, optimizing and managing transportation schedules on a daily basis; rationalizing fixed routes; managing transportation resources; planning and managing at strategic level in own-fleet operations and 3PL (third-party logistics) business development; managing home delivery orders with continuous routing and scheduling optimization; and managing the execution of the transportation plan in real time, using vehicle-tracking technology.
“We see significant growth in the take-up of grocery home shopping and home delivery operations,” says William Salter, Paragon’s CEO and president, “but there are complex requirements from the IT systems required to support both the multichannel ordering and the multichannel fulfillment of the these operations.”
According to Salter, it’s important to track the order from placement to delivery, ensuring that all required components are progressing in a timely manner to meet the customer promise. “Proactive messaging enables automated communication to keep the customer informed throughout this process,” he notes.
As these examples show, fleet management’s leveraging of technology will only continue apace.
“With major emissions changes on the horizon in 2017, it’s crucial that systems be built for the long haul.”
—John Deris, Ryder