BEST PRACTICES FOR OPTIMUM FUEL CONSUMPTION MANAGEMENT
Whitepaper
Best practices for optimum fuel consumption management OVERVIEW With the fuel prices rising all over the world and the importance of fuel in regards to the profits of a business, it is not only necessary, but also critical to understand and control fuel efficiency. All these rising fuel prices pressured fleets of all sizes to analyze expenses and develop countless strategies to reduce them. It is important to realize that there are several elements that have a strong impact on fuel consumption. The key to better manage the fuel consumption is recognizing these elements at all levels. Taking action in managing the fuel usage is all about starting with a step by step strategy and a clear monitoring process in place. Every transport facility encounters the same ever present issue – the cost of fuel. This problem continues to be a very important one, especially considering the fact that in most road transport operations fuel accounts for at least 30% of operating costs. Considering all the above, fuel consumption management is the right place to start in order to reduce operational expenses. Therefore, as important as fuel management continues to be, most fleet managers are looking to find the most effective means to improve the costs of fueling sites. In this paper, we recommend several best practices for how to better manage the fuel consumption.
WHO AND WHAT AFFECTS FUEL CONSUMPTION? From the beginning it’s essential to have an understanding of the key aspects that have a direct impact on fuel consumption. Not all the factors can be managed, but it’s important to realize their effects. On the other hand, there are other factors that can be successfully controlled by your own choices and decisions. Some of the factors that have an impact over fuel consumption are:
1. Staff members People are the most important factor within a company. They have the power to manage things, including fuel usage. Most problems that have an effect on employees are related to employment, training, determination and, of course, taking part in the fuel management program. The driver has a major impact on fuel consumption, therefore, understanding and influencing their daily activities has great impact in managing the fuel usage. 2. The vehicle After a company’s staff members, the next think with a great impact over the fuel consumption is the vehicle. There are several elements to consider in order to achieve fuel efficiency, such as: Vehicle specifications Age of the vehicle Operational details Products and solutions used All these elements impact, in one way or another, the fuel expenses. 3. The weight Every vehicle carrying additional weight will naturally have an effect on a vehicle’s fuel overall performance. Usually, this weight is changing during the journey as deliveries are made. Moreover, another factor that has a great impact on the fuel consumption is the way the load is placed in the vehicle. It’s important to know that some strategic load decisions can be taken in order to improve fuel efficiency. In short, the load must be positioned in a way that is reduces aerodynamic drag. 4. Traffic conditions and routes Fuel consumption is not only affected by the load, vehicle and the employees, but also by the type of road and the traffic conditions. All these elements have a big impact on the fuel performance of event the vest vehicles. Maneuvers such as changing gears, breaking or accelerating very often, the worse the fuel consumption will be. Also, a busy urban environment or variations in traffic can create performance results. 5. Climatic conditions Other components that have a great impact on the fuel consumption are the climatic conditions. Various weather situations like temperature variations or precipitations can result in the increased use of additional
equipment affecting fuel performance. The difference in fuel consumption between summer and winter is about 3%.
HOW TO REDUCE FLEET EXPENCES The best way for fleet representatives looking for a proper strategy to start saving is having two plans – a tactical one and a strategic one. Strategic planning examines the fleet’s service territory and it’s implemented when the current activities are no longer efficient or when new policies are foreseen. This type of planning is performed occasionally and aims to identify, in advance, the necessary resources to meet certain demands. Usually, fleet managers use excel spreadsheets to conduct territory planning. The downside of this is that spreadsheets have limited features mainly because they are unable to evaluate possible strategies of service, cost and resources to create the best program for the client and the most affordable for the fleet. An optimization system is essential in order to evaluate all these options and determine what the most suitable resources are and how to get them in the right place, at the right time and at the smallest expense. To avoid isolation and to create the best program to optimize the fleet costs with minimum efforts, the strategic planning must be incorporated with the tactical planning. Best Practice #1: Use data from the past to strategically plan future resource allocation. Go back to these plans whenever it is necessary to adjust something. The advantages of this form of planning are significant. Having the proper resources in the right place at the right time improves the quality of service and customer satisfaction. Eliminating service failures, companies will enhance equipment utilization and reduce miles. It is not unusual for strategic planning to provide the greatest savings, and in the fastest time. Tactical planning is the development of daily or weekly optimized route plans. This includes, determining how many vehicles are needed at any given time, the routes they should run, and what delivery sequence should they follow. This process maximizes vehicle use while improving the consumption of fuel. Tactical planning is not just sequencing orders for delivery; it includes examining the cost of delivery and availability to identify the most cost-effective routing and schedule. Rather than just static route plans created through classic batch optimization techniques, the planning system must include dynamic planning to accommodate change up to the time the truck is loaded – and even when in route. When an order must be added to, or deleted from the plan at the last-minute, the route planning re-examines the most cost efficient way to deliver orders.
Best Practice #2: Deploy a daily route plan based on the delivery cost and on its needs. Efficient routes outcome in reduced overall fleet fuel consumption and operating costs. Mobile and onboard computer systems, whether they are vehicle-mounted or portable, serve two major purposes: the first is to help control the journey and the second is to gather driver, equipment or shipment data during the trip. Managing the trip starts with accessing the trip plan from the incorporated planning and delivery system to communicate the route and delivery sequence to the driver. The existing generation of mobile resource management solutions permits real-time data exchange with the driver and vehicle while the trip is in progress. GPS-enabled solutions can communicate their data automatically and interactively to the integrated planning and delivery system, eliminating the need to transcribe manual logs or return a portable device to the home base, dock it, and download the data. Best Practice #3: Use electronic sensors to collect critical vehicle information. There are definitely benefits to using the latest generation of mobile and on-board computer systems with GPS. Eliminating the need to manually enter the data (i.e. paper logs), they increase the back office people and driver productivity by automatically transmitting the information to the central system. Additionally, this eliminates any human input error and the potential for falsification of data. Having all this correct information (fuel consumption, trailer temperature, engine performance and idle times) about a vehicle help build a driver and vehicle profile that managers can analyze and suggest improvements if necessary. These integrated systems that also have GPS Navigation and cellular voice communications allow the command and control of drivers and vehicles together with real-time communication. Vehicle position can be seen at all times and decision makers can dynamically change the route if required. Best Practice #4: Use a centralized, network- based system to manage the fleet. Companies need to continually find ways to improve their business, simplify operations and potentially reduce costs. Having an integrated system that takes care of the fleet’s planning, dispatch and trip management is one of the best practices. Additionally, if all the parts of the system are provided by one vendor, organizations avoid functional overlapping or having to go to multiple vendors for support. Best Practice #5: Use a solution from a single vendor. There has been both a practical and technical convergence that has allowed this sort of solutions and has significantly minimized their cost. Mobile and telematics technology has benefited substantially from the
consumer electronics industry - particularly the Smart Phones that can gather data from a variety of devices, integrate both GPS positioning and bidirectional communications, and are a multi-function platform. These solutions can deliver all necessary onboard performance and do so at considerable cost savings over proprietary hardware and network systems. Smart Phone technology has eliminated the cost barriers that stopped many fleets from previously implementing a vehicle management solution. These solutions eliminate islands of automation, process differences, and basically standardize the way of working across the business. They increase communications and process performance, and reduce costs. In addition to reduced costs, speed of implementation is a key criteria. Pre-integrated single vendor solutions can be built in easily without having difficulties in integrating them or unexpected delays. They provide the shortest time-to-benefit to the fleet owner.
CONCLUSION Best practices in fuel consumption management, maintenance and resource administration can make the difference between a cost-effective fleet and a costly error. Developing suitable and easy-to-follow procedures and policies to manage a successful operation is an essential step. Using the right fleet management system is one of the secrets to long term operational efficiency and minimized fuel consumption costs. Therefore, suitable equipment and systems plan an essential part in improving an operation’s fuel efficiency. When considering implementing a new system, it is important to first ask yourself “What features do I need?�. If the system is integrated effectively into the fuel management plan, the data can be collected in a easy and precise way, quickly identify problem areas and then fix them.
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