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Private Fleet Management System (FMS): When You Need Vs TMS, How To Make Selection

Are you juggling multiple vehicles in your business? Then, you might want to consider a fleet management system (FMS). According to Cprime, the global fleet management software market is expected to skyrocket to $43.5 billion by 2024. Obviously, this means there’s an abundance of FMS software choices out there! And guess what? Your competitors might already be using one and using the latest fleet management technology.  So, dive into this article and discover the ins and outs of FMS – what it is, what it isn’t, how to identify if it’s right for you, its key features, and tips on selecting the perfect FMS to drive your business further!

What Is A Fleet Management System and How Is It Different From A Transportation Management System?

Fleet management system

The key difference between a fleet management system (FMS) and a transportation management system (TMS) is that a FMS helps manage privately owned, dedicated transportation assets. Whereas, a TMS helps with planning, executing, and managing transportation processes. Also, fleet management systems support a wide variety of fleets such as trucks, cars, trailers, rental assets, air assets, and shared micromobility networks.

When it comes to fleet management there are 3 things needed. First, you need people or at least a fleet manager. Second, you need technology such as FMS software, vehicle dash cameras, vehicle sensors, telematics, and GPS. Lastly, you need data that includes such things as engine diagnostics and driver behavior data. To detail further what is a FMS and what it is not, below are some definitions:

Fleet Management System Definitions

FMS helps private fleet owners manage their fleets of vehicles and other assets. It provides a centralized system for tracking and managing fleet assets, reducing manual tasks, and improving data accuracy. Of note, it is usually only companies that either own or lease their vehicles that will use the full features of a FMS.

TMS helps transportation managers to plan, execute and manage transportation processes. A typical TMS will have such features as transportation planning and optimization, dispatching, shipment execution, transportation performance management, and invoice processing. Also, a TMS can support both shippers or a transportation company. Additionally, non-asset based carriers and 3rd Party Logistics (3PL) providers can use a TMS to manage shipments, transportation carriers, and owner operators.

Telematics is a branch of information technology which deals with the long-distance transmission of computerized information. A typical FMS will make heavy use of  telematics such as GPS and Internet Of Things (IoT) devices to automatically collect data about the status and location of vehicles and trailers. A TMS system will also use telematics, however its use is focused on shipment status and exception alerts.

Now, in some cases a TMS can have many of the features of a FMS. Also if a company has both a TMS and a FMS, these systems will ideally share vehicle location data with each other. Additionally as highlighted above, the FMS is usually just focused on helping dedicated fleet owners manage their vehicles and associated transportation equipment. For more information on FMS and TMS differences, see VersaFleet’s FMS Vs TMS and MyTrucking’s How A Fleet Management System And Transport Management System Can Work Together To Benefit Your Company.

When A Private Fleet Management System is Necessary.

Choosing to implement a private fleet management system becomes necessary when your organization’s vehicle fleet starts to grow in size and complexity. As your business expands, managing the maintenance schedules, tracking fuel consumption, monitoring driver behavior, and ensuring regulatory compliance all become crucial tasks. A FMS can help you scale up without compromising efficiency, control vehicle-related costs, maintain safety standards and monitor overall fleet performance effectively. To detail, below is a description of key challenges that a FMS handles for a fleet manager as well as considerations for a FMS depending on the size of your fleet.

1. Key Fleet Manager Challenges Best Handled By A FMS.

A fleet management system can do a lot for you, but what are the key challenges that all fleet managers have? Specifically, where can a FMS make your business more competitive as well as save you time and money.

  • Streamline Maintenance. Here a FMS can help fleet managers stay ahead of repairs. Specifically, it can automate many functions and also provide predictive analysis for scheduling maintenance.
  • Maximize Efficiency. FMS can optimize efficiency for drivers, vehicles, trailers, other assests, and reduce fuel costs to name a few.
  • Enhance Safety. A FMS can help improve safety through both monitoring vehicle assets and drivers.
  • Enhances Management. A FMS helps fleet managers better manage their teams and assets.

2. Fleet Size: Challenges That A FMS Can Best Address As Your Fleet Grows.

There are a lot of fleet management systems out there that cater to fleets of 1-5 vehicles to more than 50 vehicles. Below describes examples of the types of functionality that different types of fleets may need out of a FMS. 

  • Small Fleets (1-5 Vehicles).  All fleet management systems will have GPS and fleet equipment monitoring software. For a small fleet the software solution will be simple. For example, types of functions can include tracking equipment and assets, and monitoring employees. Examples of small businesses that can use FMS include HAVAC, plumbing, towing, construction, food delivery, and more. 
  • Medium Fleets (5-20 Vehicles). Here companies will need more robust tools. A lot of mid-size fleets travel further distances. So mid-sized fleets would be interested in mobile app tracking, fuel and mileage reporting, vehicle health and maintenance reminders, and more.
  • Large And Enterprise Fleets (20-50+ Vehicles). With large fleets, there is a need for more management tools and robust, real-time processing of data. For instance, fleet managers need to monitor many different vehicles at one time. Thus, the FMS needs to provide more functionality such as 360 degree location viewing, cost saving tools, route optimization, ETA updates, reporting and analytics, and more.

Key Features of A Fleet Management System.

With cloud technology and readily available wireless data communications, fleet management systems are just not for the “big guys”. Now, any size fleet can take advantage of cloud software to help them manage their fleet. Specifically, these information management systems are data-rich and have many capabilities to include:

a. Actionable, Feature Rich Electronic Dashboards.

Business Intelligence (BI) dashboards help you manage and have visibility over mileage, hours, fuel, service costs, average cost per mile, safety to name a few. Example reporting can include:

  • Usage Reports. These reports can provide information on each vehicle and its route and fuel usage, including daily driving limits and unauthorized mileage, allowing managers to determine revenue and cost per truck per mile. 
  • Risk Management. Reports can help fleet managers to Identify types of risk ranging from physical risks to equipment risks, human risks, location risks, and more. Additionally, this type of reporting aids with managing insurance and its associated costs.
  • Fleet Forecasting. Using historical data, AI software can assist with forecasting in such areas as vehicle maintenance, new vehicle acquisition, vehicle utilization, fleet downsizing, and driver acquisition.
  • Key Performance Indicators (KPI) Metrics. Based on historical data, managers can monitor trends and KPIs such as utilization, trip metrics, maintenance, and performance.

b. Integrate Telematics Data From Trucks and Equipment.

No more having to pull telematics data into Excel spreadsheets or just not knowing about the status of your fleet. Specifically, you are able to store data from other apps and truck IoT device data to get data visibility and optimize fleet performance. Also, this includes integration with Electronic Logging Devices (ELD). For more background on Internet Of Things (IoT), see my article Internet Of Things Examples – Hidden Technology Automating Logistics.

c. Track And Have Real-Time Asset Visibility.

You are able to track real-time vehicle and equipment details. For example, asset tracking software provides essential information on where equipment is at all times, how often they are used, and when they are replaced.

d. Automate and Manage Preventive Maintenance Scheduling And Execution.

You are able to reduce downtime and automate maintenance scheduling. For example, fleet managers can get automated notifications for maintenance service tasks like tire rotations, oil changes, and brake inspections. Also, FMS helps manage field service tasks.

e. Automate Diagnostics, Enhance Safety. 

By integrating diagnostic trouble code notifications, drivers and fleet managers are made aware of mechanical problems faster. This enables them to fix minor issues quickly before they turn into more significant problems on the road.

f. Manage Safety And Driver Performance.

This includes monitoring driver behavior and driver scorecards that are hooked into camera recognition technology. Also, FMS can use machine vision and artificial intelligence technology to help you detect distracted driving. Additionally, it can provide driver safety insights for positive driver recognition and remote coaching opportunities. Besides safety and measuring performance, this type of technology results in higher driver satisfaction.

g. Optimize Routes. 

Robust route optimization is usually found in transportation management systems (TMS). However, fleet managers can still leverage GPS location data in FMS to do at least rudimentary route optimization, especially if they do not have a TMS. With route optimization, managers can identify the optimum journey for each job and identify idle time on the road and at pick-up/delivery sites.

h. Meet DOT Regulatory Compliance. 

As an example, FMS are key for automating Electronic Logging Devices (ELD) requirements. FMS can track driving hours, rest periods, and the number of consecutive days spent. Also, FMS can aid with keeping track of such things as driver licenses, vehicle registrations, titles, and travel permits. Lastly, FMS can help with monitoring and reducing emissions.

How to Evaluate Your Private Fleet Management Needs.

There are a lot of software vendors out there that provide fleet management system solutions. How do you pick the right one for your fleet? First, do not get over influenced by an aggressive software sales person who can may create artificial dealines. Indeed, selecting a FMS is an important decision where if you pick the best software vendor for fleet, you will have a long-term relationship with that vendor. I recommend a three step approach that really applies for selecting any supply chain software. These steps include determine your requirements first, then affirm your future growth needs, and finally evaluate and select the best software provider for your business. See below for details.

1. Determine Fleet Management System Features You Need. 

I have already referenced above key features that you would expect to see in a fleet management system. Now, you need to look at your own circumstances to determine what are the most important features you need and ones that are nice to have. In some cases, you may either have an outdated FMS, an existing TMS, or other software that may already have features common in FMS. In these cases, you need to decide what software you will phase out, and which ones you will need to keep and integrate with the new FMS.

2. Affirm Your Fleet Size Now And Expected Growth. 

I have already referenced above the typical features that different size fleets usually desire in a FMS. Again, your fleet needs are unique and in some cases industry specific. You also need to estimate whether you expect your fleet to grow. For example, if you have 10 vehicles now and you expect to have 50 vehicles in 3 years, that will influence your decision on which fleet management system to go with.

3. Evaluate Software Vendors. 

Once you have a good idea about what your FMS requirements are, then start working with potential software vendors. Hopefully from your initial requirements analysis you can narrow your evaluation down to a small number of software vendors. 

a. Identify Vendors that Match Your Requirements and Fleet Size.

Focus on the vendors that can best meet your particular requirements and cater to your fleet size. Also, I recommend that you make a determination early whether these software vendors will be around 5 years from now. Just remember, the software vendor you pick will be a your long-term partner. So it is important to have confidence the company will be there long-term.

b. Evaluate and Compare Vendors.

Additionally, look at reviews and talk to their sales persons to see the type of support they will provide is acceptable. Next, review pricing options based on your budget. Lastly, try to identify at least two viable software vendors that you can go with. This will help you to fully understand the positives and negatives of each vendor and pick the best one. That’s it!

c. Leverage Vendor-On-Vendor Assessment To Streamline RFP Process and Gather Best Expert Advice.

Also, there is a novel vendor selection approach to both streamline your RFP process and get the best vendor evaluation information from industry experts. This unique approach is to use a vendor-on-vendor assessment to gather candid information from each prospective vendor about their competitors. With this approach, you can both minimize the number of RFP questions as well as gather invaluable opposition research from each of the vendors. Indeed, this approach works well for procuring mission-critical services such as 3PL, Software-as-a-Service (SaaS), IT outsourcing, and consulting services. For more details on RFP vendor-on-vendor assessments, see my article, SaaS Vendor Selection: Better Ways To Secure The Truth From RFP Responses.

More References.

For more on evaluating fleet management system solutions, see Lytx’s What are fleet management software solutions?. Also as a starting point, see ConnectTeam’s The 11 Best Fleet Management Software Tools of 2023 for a sampling of fleet managment software solutions. 

For more references and viewpoints on fleet management systems, see Cprime’s How To Build Fleet Management Software, 360Connect’s What Are The Different Types Of Fleet Management Software, and Merchantsfleet’s What Is Fleet Management?.

For more information from Supply Chain Tech Insights, see articles on Information Technology and Transportation.

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