World Trade - March 2009 - (Page 34) SUPPLY CHAIN AND THE ENTERPRISE passed along as old hands retired and new staff came on board. “Today, we have global positioning satellites (GPS) in vehicles and smart technologies that track idle time, engine temperature and other parameters, design routes and schedules, and even tell you how to load the trailer to maximize space to manage rolling assets better,” he notes. That increases information and, sometimes, knowledge, diffusing responsibility more broadly and, under the best circumstances, producing faster problem solving. But it also increases fixed costs. For sure, technology used correctly can make a profound contribution to an effective, cost-conscious transportation environment. “Correctly,” however, is the operative word. Are modern fleet management technologies used correctly? “That’s a leap I wouldn’t want to make,” Bentz laughs. One of Bentz’ clients found idling time unduly long in its fleet, and so installed devices to shut off the engine after a specified period of idling. Others installed electric generators that provided the power auxiliary equipment needed more efficiently than the trucks’ engines. That said, collecting such data actually could be counterproductive unless that data is properly analyzed and acted upon. If not, it’s clutter. He’s quick to note, though, that forward-thinking companies are leveraging predictive monitoring technology to manage fleet maintenance more effectively. By comparing their vehicles’ operations with those of wellrunning systems, they can ensure that vehicles receive maintenance at the right interval. The alternative option relies on general guidelines to perform specific maintenance tasks whether needed or not. Or else they wait for something to malfunction, thereby risking delays and potentially increasing the costs of repairs. A predictive maintenance program also may give companies a competitive advantage for products that include service contracts, and when to replace fleet vehicles. In fully calculating the holistic metrics, it’s worthwhile to amortize these expenses from the perspective of customer value—a well-managed fleet means well-serviced customers. While that alone won’t attract customers, a poorly run fleet may lose them. It’s also worth including how a predictive maintenance schedule may increase the residual value of vehicles. When they are rotated out of the fleet by persuading potential buyers that these vehicles have been cared for better than have similar vehicles on the market. Opportunities for productivity improvements, admittedly, are shrinking. When technology was first applied to fleet management, “the productivity gains were gigantic. Now, they’re much smaller,” he says. That’s normal, though. “We’re at the skinny end of the wedge, where improvements can only be incremental,” unless there are paradigm-shifting changes in the industry. “Technology deserves attention,” Bentz notes, but it isn’t a panacea. Use common sense 6 Strategies to Optimize the Fleet Strategies to maximize fleet effectiveness vary according to company and type of fleet, but there are some core principles that Accenture has identified to help fleets improve their quality, reliability and cost-effectiveness. 1. LOOK AT FLEET MANAGEMENT as an integrated, holistic business proposition that focuses on minimizing the total cost of ownership (TCO). 2. INTEGRATE DEMAND AND SUPPLY PLANNING. That’s as true for fleets as it is for manufacturing. Everything needed to keep the fleet running smoothly and on time must be in balance to minimize downtime and to minimize excess inventory. 3. DEVELOP A PARTS MANAGEMENT STRATEGY. Stock vehicle parts much like the manufacturing facilities stock their own necessary ingredients. Analyze what is routinely needed and the quantities and develop an inventory order system that ensures those needs are met without overstocking. 4. PURSUE CONDITION-BASED MONITORING. This works for parts as well as predictive monitoring works for vehicle maintenance. Let specified conditions trigger the maintenance or the ordering of certain parts. 5. OPTIMIZE THE SERVICE NETWORK. Design a transparent system that integrates parts, maintenance and fleet management. The system should eliminate any confusion about who’s doing what, and when, regardless of whether fleets are managed in-house, outsourced, or blended to contain elements of in-house and outside expertise. 6. EMPHASIZE FIELD FORCE EXCELLENCE. Quality of service for staff in the field can be enhanced by making activities tightly integrated, less reactive and more technology-enabled. Adding GPS to service vans and linking that to the dispatch center is one example of how technology can be integrated into day-to-day operations to save time and increase productivity. Economics and technology As a transportation manager, “It’s your job to come up with solutions that are practical and economical viable,” Bentz emphasizes. In the long run, the current economic recession is of little consequence to managers with the skills and insights to run lean operations. “Economics continually evolve,” he continues, and transportation managers need to take those changes into account. “If not, it’s irresponsible.” In that context, Bentz continues, today’s business climate isn’t so different from those of previous years. “In the old days, you ran with experienced operators and maximized the value of assets. Operators knew how to find the back-hauls and the best routes. The fixed costs were for assets and drivers.” That approach relied on individual knowledge, which often wasn’t 34 WORLD TRADE MARCH 2009 The information technology industry has several decision-making frameworks that can be used to help managers make better, more objective choices that support their companies’ strategic goals. The transportation industry,
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