Standard Bank Fleet Management – Embracing change enables fleets to be flexible and efficient

Published by Gerald Ferreira Date: November 24, 2015
Categories: General News

Dealing with the usual business-cycle and strategy fluctuations is difficult enough for any executive, but fleet managers have to stay upright while the entire foundation of the profession is shifting underneath their feet due to rapid and unrelenting technological advances.

“Under such circumstances, only those who expect and prepare for change will survive,” says Dr David Molapo, Head of Standard Bank Fleet Management, “And those who embrace change and make the most of it will thrive.”

Arguably, the greatest changes of the last few years have come from the astounding progress in fleet management technology, mostly in the form of telematics. It is as if fleet managers can now see right into the cabin of the driver, even under the hood while the vehicle is on the road – immediately and in real time.

As exciting as this is, it is easy to underestimate the extent of the disruption it has wrought in the daily operations of fleet managers. Long-established systems are being entirely discarded, not merely adapted. New technology constantly has to be researched and priced. Risky decisions have to be made about when to adopt new technology – too soon and you get blamed for squandering scarce company resources, too late and you get blamed for making the company lose market share to more edgy competitors. Not only do top executives have to be convinced into accepting the new systems, but virtually everyone else in the company too, including the drivers. Telematics produces a flood of data that threatens to overwhelm fleet managers.

But the right approach to the telematics revolution remains excitement, says Dr Molapo.

“Enthusiasm for the super-efficiency that it has suddenly put within reach of every fleet is what makes modern fleet managers thrive,” he says.

Although probably the most profound for now, telematics is only one of the changes fleet managers need to expect and embrace. Dr Molapo lists some of the others:

Changing ownership models: Fleets in large parts of the world have moved to leasing as the primary ownership model for their vehicles, but in South Africa we still stubbornly cling to full ownership. It is a cultural mind-set shift that is yet to cause discomfort to many fleet managers and their top-management colleagues, but it is hard to argue with the economics. In many cases, it is cheaper and more efficient to lease than to own.

Changing fuel prices: Just as the price of crude oil plummets, so does the rand, proving once again the merits of the strategy to reduce fuel consumption – through better driver behaviour, good maintenance management, the combating of fraud and pilfering, and, of course, considering fuel efficient vehicles.

Changing vehicle technology: It is a certainty that new models are always more fuel efficient than the last generation. This is a major factor in purchasing decisions, together with the constant improvement of safety and durability. Although the current changes are much more incremental than those brought about by telematics, revolution is in the air. It is only a matter of time before electrical vehicles make a serious entry into the market, and these will almost certainly be followed by various levels of self-driving cars. Expect much decision-making agony in years to come, but also excitement.

Changing labour conditions: Maybe it is too strong to talk about the ‘collapse’ of the system, but prudent fleet managers are learning fast not to take their drivers for granted and to be on the lookout for new recruits, who are suitably qualified. That is, if they can find new recruits. The shortage of drivers throughout South Africa continues as part of the pattern of the massive general skills shortages in the work force. Fleet managers who do not constantly sharpen their people management skills risk facing a high turnover of drivers.

Changing regulations: Recent changes to road traffic regulations make the people who hire transport companies co-responsible for accidents. This means that many road freight fleets will now have to adopt more formal safety procedures and systems in order to convince clients that they are safe to hire.

Changing road conditions: One can argue about whether the potholes are winning the race against newly tarred surfaces, and toll roads against open routes. The fact is, in a developing country like South Africa, roads change all the time, and prudent route planning is an important tool of the nimble fleet manager.

“It’s clear that change is on the way. But – paradoxically – it is a constant factor that every manager must try to predict and manage in order to move their business, employees and, most importantly, clients forward every day,” concludes Dr Molapo.