How to choose a GPS fleet management system

March 24, 2004
Operating an efficient business is a priority for every business owner. For contractors of all types, greater insight into their employee's working day and the location of their vehicles (and equipment inside the vehicles), can provide valuable clues as to the efficiency of their business.

By Shannon Murphy

March 24, 2004 -- Operating an efficient business is a priority for every business owner. For contractors of all types, greater insight into their employee's working day and the location of their vehicles (and equipment inside the vehicles), can provide valuable clues as to the efficiency of their business.

A global positioning system (GPS)-based fleet management system is a simple and effective way to gain this insight. GPS was originally created to identify the precise location of any object on the Earth, any time, anywhere. Today, one of the fastest-growing markets for GPS technology is vehicle tracking and location. Companies of all sizes are taking advantage of this technology. Choosing a GPS vehicle tracking system can be difficult.

There are many products on the market with a slew of bells and whistles. Which features do you really need? What should you look for when researching a GPS system for your business? Following are a few suggestions to make your decision easier.

1) Determine How Quickly You Need Data Updates

There are two general categories of systems to choose from in terms of data update frequency: "Real-time" or "Passive". Both have the capability to provide you with vehicle speed data, vehicle stops data, length of stop data and route taken data.

"Real-Time" GPS Vehicle Tracking Systems

Generally, a real-time system utilizes a wireless network to allow you to receive your information and view the location of your vehicles in real-time. Real-time GPS tracking is becoming the standard for companies or individuals who wish to track fleet vehicles. Some features of real-time systems include real-time zone alerts, arrival at customer site alerts, speed alerts and the ability to locate the nearest vehicle to a particular address.

Benefits of Real-time Tracking

The ability to track vehicles every minute can mean hundreds of dollars to your bottom line. Necessary costs, such as fuel and employee overtime, can be closely monitored and verified to ensure your company is operating at top efficiency.

For example, excessive vehicle idling not only uses expensive fuel, but also causes unnecessary vehicle wear and tear. With real-time tracking and by accessing the appropriate reports, fuel use can be drastically reduced--in some cases by as much as 20 percent.

Some companies have even rewarded their employees for watching their fuel use; i.e. driving with the company's interest in mind. Overtime costs are another significant expense that can be decreased with real-time monitoring.

Timesheets can be compared to a report that lists a vehicle's location throughout the day. Productivity is another benefit of real-time tracking. Planning the best route to a job and discovering how long a particular job takes can add up to more productive days and greater profit.

"Our Networkcar GPS system has helped us dispatch our service technicians more efficiently. We also now know where each company vehicle is at all times. This helps us ensure that drivers are doing what they have been scheduled to do each day," said Alan Lewin vice president Merry X-Ray Chemical Corporation.

"Passive" GPS Vehicle Tracking Systems

When a passive unit is installed in a vehicle, the GPS location data is stored in the GPS receiver and downloaded from the vehicle at the end of the day or when the vehicle returns to the yard.
Passive systems can be downloaded manually (where every driver turns in a memory module or key at the end of the day), or automatically (where your data is transferred wirelessly to a computer via 900mhz when the vehicle travels within a certain distance of the yard). Passive systems are recommended for companies who do not have a need to review the activities of their fleet in real-time.

2) Decide What Information is Most Important

Monitor Vehicle Parameters

Many companies want to know how fast their drivers have been driving at any particular time of the day. Their objective is to prevent unnecessary gas consumption, speeding fines, wear and tear on the vehicle and accidents. Odometer reading is another parameter that can now be accessed remotely. Companies can eliminate manual mileage tracking which can be time consuming and error prone.

Monitor Vehicle Diagnostics

Some companies offer a type of diagnostic device whereby an employee must remove the device from the vehicle at the end of the day to download the data. Other companies, however, send diagnostic information wirelessly and immediately to a website. Diagnostic information is beneficial as it allows you to get early warning of a vehicle problem enabling you to repair small problems before they become larger more expensive problems.

Having a precise description of the problem ahead of time can streamline the repair process for technicians. Diagnostic monitoring also allows you to reduce vehicle downtime because the vehicle is better maintained. Several years ago Vetronix concluded an exhaustive study involving one of the five largest commercial vehicle fleets in the world.

Vetronix equipped 56 vehicles with telematics boxes that provided data about driver productivity, safety/security and diagnostics. Based on the data, Vetronix concluded that the fleet operator could save $2,000 per vehicle each year from remote diagnostics alone. The test showed that by catching problems early, the fleet could improve fuel economy, minimize breakdowns and lower the total cost of repairs(1).

Secure a Vehicle or Supervise Driver Work Habits

When the driver parks a vehicle and leaves it unattended in a high risk area, they may want to secure the vehicle from being stolen. In certain situations this may involve placing what is known as a geofence around the vehicle.

A geofence is a defined distance away from the vehicle that the vehicle must travel before it activates an alarm. The alarm can be turning on a siren in the vehicle, sending an e-mail alert to the vehicle owner or an SMS message by cell phone. Fleets also use this feature to be notified if their drivers travel beyond the boundaries of their normal work area, for instance.

Exchange Data with a Driver

Do you need to send orders directly to the driver? Are you interested in both tracking a shipment and knowing its status such as "not picked up yet", "being delivered", "delivered", etc.
This business logic generally doesn't have anything to do with "vehicle tracking" per se, but it is an integral part of tracking the vehicle because when you are tracking a vehicle, you are essentially tracking anything associated with that vehicle, such as the driver's working hours, shipment status and so on. This business logic is intended to save you time and money over the less optimal way you are probably doing it now.

Access Vehicle/Employee Reports

These reports will provide important and sometimes surprising information on your vehicles and your employees. Some systems offer only a few reports, while others provide you with a variety of ways to better manage your business.

3) Develop a Budget for Fleet Management Technology

Investigate monthly charges

Depending on the type of system you select, you will likely pay for the in-vehicle hardware and a monthly service fee per unit for wireless service. While hardware fees may seem comparable between companies, be sure to understand the monthly pricing structure since those fees can vary dramatically.

4) Address Employee Acceptance

How should I address privacy concerns?

It is important to let your employees know that these systems were not designed to stop them from getting coffee at a convenience store. They are designed to help you understand where your vehicles are and the working progress of employees.

Drivers can also benefit from a system because it helps distribute work fairly and will show if certain employees are doing more mileage/work than others, providing bonus opportunities or a change in work distribution. In case of accidents or other safety issues, the system can find the vehicle and send assistance.

The system also provides proof of service, in case a customer claims your employees were late or didn't arrive at all. By increasing productivity and decreasing costs, the system can help businesses run at peak performance and stay financially sound.

Fleet management systems are now affordable for even the smallest business owners. Technology has advanced enough to make these systems easy to use and easy on the pocketbook. If you've ever wondered if your vehicles are operating properly, where your vehicles are and if your drivers are on schedule, a fleet management system may be the answer.

About the Author: Shannon Murphy is a Communications Specialist for Networkcar. She can be reached at 970-482-6031 (

1. Remote Diagnostics - The Next OEM Frontier; The Hanson Report on Automotive Electronics: Portsmouth, NH, Dec. 2003/Jan. 2004.

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