Fleet Management Circa 2018
There will be dramatic changes in new-vehicle purchasing processes, remote vehicle diagnostics, increasingly “smarter” vehicles, and next-generation online fleet management systems powered by fleet-specific social media.
It will become more expensive to operate a fleet in the coming years. Vehicle acquisition costs will increase to meet new CAFE requirements. Fuel prices, in all likelihood, will trend upward, maintenance costs will ratchet higher due to increased vehicle complexity, and there will be steady incremental increases in vehicle-related taxes.
The stark reality is that there are diminishing opportunities to reduce cost and enhance fleet efficiency, especially among well-managed fleets. The "low-hanging fruit," so to speak, was picked long ago. Increasingly, fleets will turn to technological solutions to address these problems. In coming years, there will be greater acceptance by tech-savvy senior management that technology can maximize the productivity and the revenue-generating capacity of each company driver at the lowest possible cost point. Concurrently, there is the emergence of a new generation of young fleet drivers, the youngest of whom do not even know how work was done prior to the Internet. This generational shift is resulting in an increasingly tech-savvy work force that is more willing to use technological aids in their day-to-day work environment.
How will these technological changes impact fleet management in the next seven years? Experts from seven fleet management companies (FMCs) offer insights about emerging technologies that will impact new-vehicle purchasing, employee productivity, maintenance management, onboard vehicle technology, the next generation of fleet management systems, and fuel management.
Next Generation New-Vehicle Selection and Purchasing
Over the next seven years, the evolution of the next generation of Web-enabled technologies will change new-vehicle selection and purchasing processes, creating new opportunities for fleets to reassess vehicle selection and acquisition strategies.
Future new-model ordering will offer improved data quality and connectivity between OEMs, end-users, and FMCs. There will be faster availability of new-model information, specifications, buildout notifications, pricing, etc.
Future FMC applications will gain the ability to capture driver satisfaction with previously selected models to assist fleet managers in developing future model-year selectors. In addition, more sophisticated fleet management systems will allow for more precise operating cost predictions to ensure optimal model selection. Also, there will be greater real-time information on status and expected completion dates of truck/van upfits.
"Technology improvements by fleet management companies and OEMs will shorten cycle times, improve communication, and make it easier for fleet managers to complete the OEM planning, bid, selection, ordering, and delivery processes," said Mark Smith, strategic consulting leader for GE Capital Fleet Services.
Technology will make it commonplace for online ordering systems to display 360-degree views of vehicles. In addition to viewing a vehicle's exterior, fleet buyers and drivers will also be able to view the interior content. In addition, these systems will allow users to preview different exterior/interior color combinations before making a final selection.
Chris Tepas, vice president of marketing for Emkay, envisions "virtual test drives" via a manufacturer's online simulator, in which a user can build a virtual vehicle by selecting trim level, options, and colors. "This virtual vehicle could be used to simulate a test drive online that would most likely use video-game-type technology. This will help fleet managers and drivers make quality decisions on fleet purchases without requiring travel," said Tepas.
From a supply chain management perspective, there will be more complex data integration between manufacturers and upfitters with the objective of minimizing order-to-delivery time and increasing accuracy.
"We predict the industry as a whole will move toward more sophisticated predictive models for lifecycle costs and replacement cycles," said Steve Haindl, CIO for Automotive Resources International (ARI).
A parallel trend is the incorporation of more and more onboard technology in future model-year vehicles by OEMs.
"Our domestic OEM partners are taking aggressive steps in this area by adding more and more technology to their product lineup. As a result, fleet managers are making educated decisions on how these technology-driven vehicles will assist them and their drivers. Fortunately, vehicle manufacturers are making these new technology features easy to understand and utilize. A vehicle equipped with added technology options may show positive results at resale as well," said Carolyn Edwards, director of operations, vehicle acquisition for LeasePlan USA.
In addition, OEM-installed onboard technology will ultimately have real-time integration with FMC fleet management systems.
"Vehicles will become the platform for delivery of driver communications to supplement current [FMC] call center capabilities. This includes the ability to pull real-time information (such as diagnostics, location, and mileage) and the ability to push communication directly to drivers," said Steven Loos, vice president of information technology and chief information officer for Wheels Inc. "This, coupled with location-aware applications via GPS, will provide real-time applications for driver productivity, such as directing them to the nearest fuel station with the lowest priced fuel or to a specific service facility because it is the nearest in-network provider."
However, the increased cost of technology must be justified by a corresponding return on investment (ROI).
"Technology, in terms of vehicle selection, will come at a cost," said Barry Steel, senior VP of sales development and strategy for Donlen. "Vehicle technology, such as next-generation hybrids, multiplex wiring, crash avoidance technologies, etc., is all about the ROI. We have not seen the final solution yet. The OEMs are experimenting with every technology that can be imagined today. Someone will ultimately invent something new that will be a 'change agent' across the automotive landscape."
Another future trend is that non-traditional OEMs, along with emerging manufacturers marketing new all-electric and hybrid models, will become integrated into the fleet ordering systems of all FMCs.
"Foreign and new OEMs (electric, hybrid, and others) will be integrated with fleet management companies providing online factory ordering, vehicle status, warranty recovery, and more, similar to the way Ford, GM, and Chrysler are currently engaged with fleet management companies. New technology applications will make it easier for companies to become more granular because it will allow them to better segment their fleets, and they will continue to move away from a one-size-fits-all approach," said Smith.