When it comes to trucking and transportation companies, what goes on in the office is important, but there is another expense that should be considered. Fixed assets, such as vehicles or machinery, make up a large percentage of a company’s budget. Monitoring and managing them effectively is crucial to ensure that those expenditures are not a waste. Despite the burden of depreciation that is attached to such assets, their value lies in how they assist in generating income years into the future.
We have been talking a lot about technology lately, and the different ways fleets can use it to their advantage. Asset management software is one example of a tool that can help you easily oversee all of your assets. On the surface, it might appear as though this type of software only tracks and locates assets with the main benefit being security. However, this is merely the tip of the iceberg. Asset management software has a myriad of benefits that may not be immediately apparent but provide equal value to any fleet manager.
But what are all the benefits of asset management software? Let’s explore what these benefits are so you can start taking advantage of them sooner rather than later. You don’t want to leave tools like these on the table.
What is Asset Management?
First, it is important to describe what asset management is. On its face, it sounds like a simple concept. When in fact it represents a systematic approach to managing tangible assets, whether individually or within an organization. From procurement through to selling or disposal, there is a specific life cycle that assets go through. Asset management helps you to essentially manage that life cycle.
The term is commonly used in the financial sector but translates to business as well. Trucking companies, for example, have lots of fixed assets that go through a life cycle. Companies are always looking for better and more efficient ways to manage and make use of the assets they have.
Better Inventory Management
Asset management software can help companies keep track of inventory, no matter where the assets are located. Many asset details, including the brand, type, purchase date, current location, movements and, servicing and licensing information, can be stored. This automated data capturing process takes away the need for manual entry, thus lessening the potential for errors.
When auditing season rolls around, you have all this asset information at the ready to hand over to the auditors, making the whole process easier for you and them. What’s more is that asset information can be made available online so that those who need it most have instant access. This same information can be placed into automated reports for after-the-fact analysis.
Maintenance and Service Scheduling
Asset management software can be used to set up maintenance and service reminders. These types of reminders help you be proactive and reduces the risk of unplanned breakdowns. Unplanned breakdowns can hinder your team’s productivity and potentially cost you money due to missed production goals. Furthermore, maintenance and service reminders can extend the life of your equipment and reduce overall repair costs.
Compliance
Setting up licensing and certification reminders with the help of asset management software can ensure that you always meet compliance requirements. You avoid potentially incurring fees for operating with expired documentation. Also, if your assets are out-of-date due to oversight, they cannot be utilized until renewals are done. This can result in unnecessary downtime, hurt your rate of production, and put a dent in customer and partner trust.
Fuel Usage
Fuel costs often take up a large percentage of a project’s budget. And with fuel costs ever rising, it’s easy to see how strictly managing your fuel usage can be advantageous. Asset management software gives you the ability to log your fuel usage. Aside from this feature saving you money, it can offer you many other (perhaps lesser known) benefits.
When you purchase a piece of equipment or apply changes to an existing asset, fuel usage monitoring can help you see whether it is performing better or worse than before. You can, for example, establish whether fixing a problem or performing maintenance on a machine has an impact on fuel usage and, thus, running costs.
Monitoring fuel also reduces the potential for theft. Over a period, you will build up a sturdy database of fuel-related information. Using that information, you will be able to see how much fuel is used on average by a piece of equipment. Should fuel expenditure increase rapidly for no reason, it may be an indication of fuel theft. Or, should that not be the case, it may be a sign of an overlooked leak or something similar.
Furthermore, fuel usage monitoring helps you calculate how much it costs to run a piece of equipment and, in turn, that figure can be added to project costs to calculate return on investment.
Better Asset Utilization
Equipment is expensive, so it makes no sense from them to be unutilized. Daily tracking of your assets’ movements can give you a good idea of how many hours a piece of equipment is in action and which assets are simply gathering dust.
Knowing your utilization ratio can prevent you from purchasing or renting equipment you don’t need and identify equipment that simply is not necessary. Unused equipment can also be transferred elsewhere if a need for it is identified at a different jobsite.
In addition to the above, you can check for overutilization. When a piece of equipment is being used to its full capacity and there is still more to be done, it might indicate that an additional purchase of the same asset is needed. This will help reduce wear and tear on overworked assets while also reducing how frequently you need to schedule maintenance.
Lower Your Insurance Premiums
Insurance premiums can be reduced by improving your security measures and minimizing risk. If your insurance provider knows you use asset tracking and geo-fencing, it can lead to reduced deductibles and lower insurance premiums because of the increased security. In addition, asset tracking reduces the potential for theft and increases worksite safety, which improves your risk profile in the eyes of the insurer.
You can also potentially lower your premiums by reviewing the equipment that is covered by your current policy on a regular basis. Because asset management software keeps a record of the equipment you do own or rent, you can see when your policy may need updating – whether it be by adding equipment not previously included or removing equipment that is obsolete.
Better Job Estimation and Billing
Asset tracking helps you keep an eye on machine hours and fuel usage. This data can be combined with labor costs for more accurate billing. The analysis of data from previous projects will improve your estimation on future tasks or jobs. In turn, you can submit more competitive bids.
Increased Machine Operator Efficiency
The performance of your equipment operators play an important role in the efficiency of your worksite. Tracking your assets can help you identify bad habits on-site such as prolonged idling, speeding or erratic movements. These types of operator habits can lead to rollovers and the overworking or misuse of equipment. Eliminating them can produce safer worksites, reduce labor costs, and reduce wear and tear of equipment.
Of course, many trucking companies want to make sure they aren’t just making a blind investment. There may be interoperability with other systems already in use within the company. It is also important to select a vendor you believe can deliver on the promise of a user-friendly system that meets all your internal needs. As with any major investment, proper due diligence is key.
Investing in asset management software makes a lot of sense for any company that uses expensive equipment daily – especially since the completion of projects is often reliant on the efficiency of that equipment. Not only does asset tracking and locating reduce the risk of loss and theft but also streamlines day-to-day processes, minimizes costs and maximizes revenue.
Furthermore, it suits all kinds of assets (from excavators and trailers to compressors and harvesters) and can be used within any type of industry: a win-win for all. When all you need to do is have a look at a few vendors, there is no reason not to consider adding an asset management solution to a mid- to large-size fleet.