Your vehicles are one of the biggest investments you will make into your company, and your fleet is one of your largest expenses. Going from one vehicle to two, or three, or 10 opens a whole array of costs and areas requiring close management. Vehicle payments, insurance, maintenance and fuel are all added expenses – so do you have a plan in place on how to handle these issues, or are you just figuring it out on the fly?
Even more, adding vehicles means giving your technicians more freedom and responsibility. And responsibility without accountability can be pretty expensive, even with great employees.
This was a lesson Kash and Tanya Weger of Madison Window Cleaning (MWC) Company, Inc., in Madison, Wisconsin, learned in 2008 when they installed a telemetric (fleet tracking) system in their vehicles without telling their employees.
“We didn’t believe that certain jobs were taking as long as our technicians said they were, but there was no fail proof way to verify if they were telling us the truth,” she explained. “It was becoming a routine issue and causing some problems.”
After having their first system installed, they kept quiet and observed their crews’ behavior for a couple of weeks – and they were surprised by what they learned. Long lunches. Unauthorized pit stops. Indirect routes. Excessive idling. Speeding. And the list went on.
After two weeks of collecting data, Kash announced to his crews they had a tracking system installed and had been monitoring them – and that he’d be talking one on one with some of them afterwards. “It sent a pretty strong message,” Tanya said. Some warnings were issued and the behaviors did change going forward.
At that time, MWC had four vehicles. The cost of the fleet tracking system was around $250 a month. Initially, it was a hard investment to make, but Weger said she saw the benefits instantly – and with it came huge monetary savings.
Putting numbers to paper, she realized that if she could correct misbehavior that wasted just 30 minutes per day per truck, she would gain back two hours of billable time per day – not to mention eliminating wasted time she was paying her technicians. Two hours per day times five days gave her back 10 hours per week. “The positive side of regaining that time back is thousands of dollars monthly,” she added “The more trucks and employees you have, the bigger these numbers are.” Suddenly, the $250 per month didn’t seem like much.
As Weger points out, having a fleet management system installed helps keep people honest. “If you truly want to know what your technicians are doing in your vehicles, you need to know where your vehicles are every moment of every day…very specifically. Otherwise, even your best employees can take advantage of the system.”
Some employers are uncomfortable playing “big brother” to their employees – especially when those employees are friends or family members.
But that’s not the only reason to use a telemetric system, and you can explain this to your staff. And it’s certainly not the only important factor you need to keep an eye on when managing your fleet.
Five Keys Areas for Managing Your Fleet
One of the biggest mistakes company owners make when adding a fleet is not having a management plan in place. While a telemetric system can greatly help, it is not a requirement. However, you do need to have a plan, then you need to work that plan.
- Your Acquisition Plan Buying a truck and building a fleet can be one of the most rewarding aspects of your cleaning business. Too often, however, contractors find themselves in a pickle and they have to make rash decisions. Their vehicle poops out. It’s going to take too long or cost too much to repair. They need a truck NOW so they buy something – anything – to get back on the road. And without a plan in place, they later regret their buying decision.
If you have a vehicle acquisition plan in place, however, you’re going to be much more likely to make a smart buying decision. Research your options, and then make a plan.
- Do you want to buy new or do you prefer used? What are the benefits/disadvantages of each, and which option fits you better?
- What size vehicle do you need? Are you thinking not only about what services you offer now, but what services you may want to offer in the future?
- Can you retool this vehicle if needed? For example, can a ladder rack be added later? Will it meet future weight requirements?
- Are you going to purchase based on life cycle or on need?
Weger suggests not purchasing all your vehicles at once because they all age out or start having issues at the same time down the road. Another suggestion is to purchase the same make so that they can all go to the same dealership for maintenance and/or warranty repairs.
This is also important for image. Weger said all their trucks are white Ford F150’s. They all have the same graphics package. When they are seen around town people state, “I see your trucks everywhere!” Think of some of the fleet vehicles for various companies you see around town – you tend to notice them more if you see the same thing over and over. It really helps boost brand recognition.
- Your Maintenance Plan
“If you think your employees will make it a priority to tell you when it’s time for the next oil change or that the brakes are squeaking, or it has a hard pull to the left, or is leaking oil in the customer’s driveway, you are mistaken. But you still need to be asking them,” Weger explains.
She points out different trucks may have different maintenance issues. “My route truck puts on fewer miles, but its brakes wear out faster because it’s in-town, stop-and-go traffic. My residential truck, on the other hand, puts on more miles and requires more oil changes.”
This is another advantage of having a telemetric system as it will alert you when certain metrics – such as mileage or time – are met, and when it’s time to have routine maintenance done.
Again, you don’t have to have telemetric system in place. You can use a calendar to remind you when oil changes, etc., are due. Or you can require your drivers to hand in a weekly check sheet that includes the current mileage (among other things) before you give them their paychecks. To keep up with this information, Weger suggests keeping a separate folder on each vehicle, keeping all records separate and organized.
“It’s all about creating a habit and a routine so your trucks don’t break down when you need them most,” Weger explains. “I can’t even remember in the last six years when I’ve had to go after a broken down truck for any reason, and we do have used vehicles that are 10 years old.” She feels it is far easier and less costly from several perspectives to maintain a vehicle than to replace or repair one. Tracking that expense from a profit and loss and balance sheet perspective has proven it to be true.
- Your Fuel Plan
Who on your crew is allowed to refuel the vehicles? When and where? How do they pay? These are questions you need to figure out.
MWC’s technicians refuel the trucks right before coming back to the shop. “It’s the end of the day and the team wants to go home, so they don’t dilly dally.” Also, at the end of the day there are no customers waiting for them to arrive.
For the past decade, MWC’s employees have fueled up at the gas station down the street from their shop. Weger has set up a no fees, no credit card, no interest plan where certain employees are allowed to go in and refuel the vehicles. “We have a signature process in place. We get the receipts and the signature sheet at the end of the month to make sure there were no unauthorized charges, then we just pay that bill once a month.”
Weger likes this method for several reasons, including the fact that her crews don’t have to keep up with credit cards. “Of course, some companies like credit cards because they can accumulate points. That’s great too,” she stresses. “Again, the key is to have a plan that works for you.”
Second, do you have a budget for fuel? This can be difficult to determine, as you don’t know exactly how many miles your team will drive or what the price of gas will be. However, if you have a system in place, you can go back and see how many miles you drove during the same time period last year to give yourself a basis for a budget.
“Some months my fuel bill goes up by several thousands of dollars. I’d like to know that in advance,” Weger adds so it’s a planned for expense.
- Your Driver Safety Plan
Several years ago, one of MWC’s vehicles was broadsided. The truck was totaled. The driver and passenger both injured. While the accident could have happened to anyone, Weger explains that if you don’t have a good driver selection and safety plan in place, this type of scenario may be more likely to occur.
Weger has worked with her insurance company, which has several resources to help in the driver selection process. When interviewing for new hires, a motor vehicle abstract will be pulled, either by having the potential hire provide it or they must sign a release form that allows them to get a copy. Then their insurance agent reviews it against their point system for violations. “They either pass or fail based on this point system,” she explained.
The process continues after employees are hired. “Just because they’re clean coming in doesn’t mean they stay clean. That’s why we have a policy in place that says if you get in trouble outside of work, you need to let us know.” She further commented, “Usually they don’t want to tell you because they don’t want to lose their job.”
You can also have your insurance pull records periodically to monitor the status of the driving record and activity. That said, Weger adds that it is hard to find someone with a squeaky-clean driving record. Rather, she’s more concerned with looking out for either more severe violations or multiple violations that occur within a short period of time. She’s looking for something that indicates that they do not practice safe behaviors or are poor drivers. “Bottom line is we don’t want anyone hurt or property damaged.”
It’s also important to keep driver safety on the top of your employees’ minds. “Motor vehicle safety is as important as fall safety. Employees are in that truck one-fourth of their day, and a driving accident can kill you too,” Weger explains. Address driver safety in your meetings and toolbox talks. You want to discipline or hold accountable those who have infractions and reward or recognize those who don’t.
Speaking of accidents, do you have an accident policy in place? With MWC, if an employee has an at fault incident causing any type of property damage, s/he is responsible for paying up to the first $500 in damages (basically the companies’ out of pocket deductible). (Weger stresses you need to check with an attorney to find out if this policy is legal in your area.
A written policy and signed acknowledgment needs to be in place first and foremost.) Having employees know they will be held accountable to pay for a portion of the damages, just as they would if it was their own property, reinforces the desire to avoid accidents and think and act in a more caring manner. The last thing MWC wants to do is be charging and employees for damages; however, they are firm believers in accountability.
Again, having a fleet management system in place is a great way to keep an eye on how your employees are driving. You can set up alerts – such as speeding or hard starts and stops – and your system will alert you when your drivers are practicing unwanted behaviors. “You may not want to watch these things all the time, so you can turn them off and on, just checking in on your crews every once in awhile.”
- Your Fleet Tracking Plan
When Weger first installed the telemetric system, she noticed some of her crews would always swing by a local convenience store/deli on their way out – often wasting a good 15 minutes.
It turned out they were stopping for coffee, breakfast and a newspaper. To top it off, they’d leave the vehicle running while they ran in.
In another situation, one crew would always go through town rather than take the beltway because they said it was shorter. It was stop and go traffic and took them longer to get to their destination…and it allowed them to look at the pretty college girls at the local university on their way by.
When choosing between the shortest route and fastest route, Weger says always take the fastest route. “Your technicians’ pay is costing you more than their fuel.” By installing telemetric, you can make sure your crews are going where they are supposed to the way they are supposed to.
If they happen to get lost, a telemetric system will help you guide them back to where they need to be. Additionally, when customers call to see when your crews should be arriving, telemetric lets you see exactly where they are in route to the customer’s property.
Finally, while Weger does not allow their technicians to take vehicles home, a lot of companies do. By using telemetric, you can know for certain whether or not your employees are using your vehicles for their personal purposes.
Worth the Investment
There are several reasons why companies with fleets don’t invest in a telemetric system. Probably the most common concern is the cost. Again, Weger quickly discovered that the lost time they gained by adding telemetric pays for itself many times over each and every month.
Another concern is the amount of time that goes into setting up the system. “Once I got the initial system set up, I really haven’t had to do much else,” she adds. “The system does the rest.”
Finally, some employers are concerned about offending their employees by adding a telemetric system. Again, in addition to watching their behavior, telemetric can make their jobs easier. It helps you keep their vehicles running. It helps ensure their safety through smart driving decisions. It keeps you from having to contact them to ask where they are or when they will be at a customer’s property. It also helps you save money, which leads to their job security as well.
As Weger concludes, “Adding a telemetric system is absolutely worth the investment. It’s worth making people a little uncomfortable by making them more accountable. And it’s an investment you will see an immediate return on in so many ways once you put the processes in place.”