8.6 Potential Challenges and issue with modern fleet management systems.
Fleet management systems has been in existence and used for decades since the introduction of vehicles. With advancement in modern technologies, iterations were made on the existing systems and the FMS proved to be valuable productivity toll to business and organisations dependent on fleet (Financesonline, 2018). However, despite the effectiveness of the FMS, challenges and issues were encountered as noted below:
• Cost reduction – Managing fleet expenses in a changing business climate, unexpected events involving major accidents, and “volatile fuel prices” has become a constant struggle for fleet specialists (Financesonline, 2018).
• Information and Tech overload – Fleet specialists are not formally trained as IT specialists and this will be a challenge as all the information from the inventory fleet and drivers will be coming to them for decision making. Another challenge will be with lack of knowledge from the drivers and mechanics on “data handling and software functions” (Financesonline, 2018).
• Driver safety – According to finances-online (2018), fleet managers have highlighted this as their major challenge when dealing with how to address preventable accident rates and related repairs, downtime, and liability cost since accidents can happen anytime while with advanced FMS.
8.7 Fleet management system and financial and operational risk management
Although risk can be view from diverse directions depending on the activity to which the risk relates, our interest in this literature is on financial risk, as in related to the microfinance industry and its micro-lending activities. Chakrabarty and Bass (2015:488-489) defines generally as the potential for events or ongoing trends to bring about future losses or a decrease in future income, of a financial institution, or a total deviation from the originally intended social mission. (Thomya & Saenchaiyathon, 2015:159) argues that enterprise risk management view which refers to the integration of all risks pertaining to the organisation and managing them as opposed to managing the organisation’s risks individually adds more value to the organisation, as it affects its “performance positively”. The fleet management industry is no exception to financial and operational risk, which may stem from inability to “track overdue maintenance periods, poor maintenance, due to poor workmanship, leading to increased cost of maintenance, and the total depreciation of fleet assets, which generate a high maintenance cost” (Thomya ; Saenchaiyathon, 2015:159) . Poor maintenance on the firm vehicles will constitute to having unreliable fleet management systems.
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Fleet total cost management:
In a highly competitive business environment organisations seek to cut cost at every value chain activity possible (Thomya ; Saenchaiyathon, 2015). The fleet management industry is not an exception. High cost of maintaining an organisation’s fleet means “lowered profitability for the organisation”, as the total cost of managing the organisation’s entire fleet will increase (Thomya ; Saenchaiyathon, 2015). Firms operating with high fleet costs will eventually function with ineffective and less efficient fleet inventory thus influence the reliability and availability of its fleet vehicles.
This literature review section, has explored the impact of an effective fleet management system on maintenance, and different issues relating to the topic, a theoretical framework was formulated and different components of the systems were investigated