The Value Of Information

When implementing new technologies in fleet operations, running and startup costs have been the biggest obstacles. Those who previously ruled out global positioning satellite (GPS) systems for those very reasons should check again.

With a new pricing model that has gained popularity within the last year or two, costs for satellite tracking are now far more within the reach of everyone. A growing number of on-demand solutions make GPS more affordable—between $15 and $50 per truck per month in most cases, depending on how often customers want reports and what they want those reports to contain.

Under most of these new on-demand models, not only is vehicle location data gathered, but the information can be tied into Web-hosted fleet and transportation management packages that also perform route planning, load building, carrier selection, scheduling, address verification, mileage computing, fuel tax recording, engine and driver performance monitoring, benchmarking and more. These software packages can update the other functions as vehicle location and status data changes.

"It's one thing to know where your people and assets are, but the real question is what you do with that information," says Chris Jones, executive vice president of solutions and markets at Descartes Systems Group, Waterloo, Ontario, Canada, which offers GPS as a component of its On-Demand Fleet Management Service.

"GPS data by itself is nice to know, but you have to tie it into a plan, a route and other data. You should also be able to collect speed, engine data and driver performance as well as a breadcrumb trail to see where the driver was, what he was doing and did he stop when he was supposed to," adds Tom Lemke, executive vice president of Cadec Corp., Londonderry, NH, which merged with Atlantis Data Systems (ADS), Houston, in October to leverage that company's on-demand GPS and fleet management service.

In announcing the merger, Lemke says, "We've seen a real desire for subscription service, and one of the reasons for the merger was because ADS offers this service. You can pay as you need data. You pay a monthly fee only for what you use. You can pay by ping, by route, or set it up to ping a truck only at certain times of the day. There's a lot of flexibility with these systems."

Pay As You Play
The growth of on-demand services is also changing how GPS providers offer their service. In the past, companies that wanted to deploy GPS had no choice but to shell out thousands of dollars up front for software, transmitters and receivers before starting. Today, very little hardware is needed as most services feed off the wireless-to-Web devices—;such as mobile phones, laptops and PDAs—;that drivers already have with them in the cab.

"Companies today are simply less willing to make large upfront investments in technology without knowing if and when they'll achieve benefits," says Adrian Gonzalez, a principal at ARC Advisory Group, Dedham, MA. "Instead, they prefer solutions that implement quickly, require minimal IT involvement and can be paid as the value is realized. These are the primary selling points of on-demand solutions."

That was what led Stewart Foodservice, based in Barrie, Ontario, Canada, to employ Cube Route Visibility, from Toronto-based Cube Route, in early 2004. "Given the size of our organization, we could not justify the budget to implement tracking and dispatching solutions that require large upfront capital investments and infrastructure changes," says Dennis Hrytzak, director of finance.

"With Cube Route we achieved visibility into our delivery process without disruption to our service or any capital investment," he says.

The same can be said of Olympic Wholesale Co., a bakery/foodservice distributor in Pickering, Ontario, Canada, and another user of the Cube Route solution. "We're already dealing with razor-thin margins and the inability to generate more revenues through price increases. Our only option was to find a cost-effective solution that could be adapted to our operating environment and culture, and provide the base level of visibility we required," recalls Bob Haliburton, distribution manager.