A new truck can generate six terabytes of data over the course of a year. By any measure, that’s a lot of information. In fact, fleets are deluged with data, but all too often they only use it tactically rather than strategically.
With a strategic approach you have to collect and manage all the information from telematics systems, fleet management/maintenance software, fuel card systems, the vehicles ECM, corporate finance systems, etc. In essence, you have silos of information coming from independent data sources that you need to collect and warehouse together in one place.
Having all the datapoints from the different silos gives you more visibility into the total cost of ownership (TCO). Once you have all the data in one place cleansed and normalized, you need to decide what problem you want to solve and what datapoints will be required to help you solve the question at hand.
Let’s use the strategic decision of buying a new truck to replace an existing one as an example. The information needed to make this decision includes maintenance and repair costs of the existing assets, the fuel consumption of both vehicles, the cost of fuel, the cost of the asset, the vehicle’s utilization, interest rates and resale value. You also have to have an understanding of how long you want to keep the asset when making the procurement decision. That depends on its most efficient life cycle, market conditions and other factors.
You need to look at historic information about how existing assets performed in that same application along with current market conditions and conduct life cycle optimization modeling to forecast how long you should be running the new asset.
When thinking strategically about asset acquisition, you need to have a solid understanding of how long the asset needs to run to so you can buy right. Next you need to find the right financing for that asset. Keep in mind that it is best to have some flexibility in the financing in the event you need to keep the asset past the projected life cycle or if you need to dispose of it sooner than anticipated.
Having the right data and using it strategically allows you to do three things:
- Secure an asset and understand its optimized life cycle for the application.
- Wrap a financing structure around the asset and its life cycle.
- Have the flexibility to extend or shorten the financing terms while operating the asset.
Having all the data you need in one place allows you to compare the running costs of a new piece of equipment against the running costs of a current piece of equipment to determine which will give you the lowest TCO. The lowest TCO is a goal every fleet manager should strive for with each vehicle in their fleet.
Frank Bussone, Vice President of Data Science & Analytics for Corcentric, has spent more than two decades providing business analytics and business intelligence to the transportation and real estate industries. For the past six years, he has helped Corcentric customers find lower cost solutions for their truck fleets by working through the big data broadcasted from trucks.