How to Implement GPS in Your Delivery Operations
Sponsored by: Definitive Homecare Solutions & CPR+
- By David Kopf
- Jul 01, 2010
These days, providers are searching for any and every efficiency they can find, and their delivery operations represent a cost center where they can make significant financial gains. Every mile that can be saved represents money that goes back to the bottom line. Fortunately there are various technologies that can help HME providers wrangle their delivery fleet and vehicles to create a smooth-running, cost-effective machine.
A key tool in that regard is global positioning technology. With GPS, providers can manage their deliveries and drivers using a system that lets them monitor each truck in real-time, which results in improved operations and reduced overhead.
How it Works
GPS fleet management systems are fairly straightforward. In a typical system, each delivery vehicle is outfitted with a GPS device that incorporates both a receiver and an antenna. The GPS device is installed in the truck and is permanently hardwired to its electrical system so that it has a constant power supply and cannot be removed. Additionally, there are other systems available that leverage GPS-enabled mobile phones and handheld devices that drivers carry with them.
The GPS devices — installed in the vehicle or handheld — constantly receive their positioning information from GPS satellites and report it back to indicate where they are geographically. Typically the information is sent to a GPS service provider’s system that the HME can then access via client software or a web page.
Using the system, delivery management can observe where the trucks are on a map, which also typically points out the stops they have made and the stops they have yet to make. Back office staff can drill down on each truck to get various pieces of information, such as:
- How long the driver has taken driving from stop to stop, and how long each driver has taken at each stop. An atypically long stop could serve as an indication that management might want to follow-up and find out why it took so long. And of course, this sort of information also shows whether the driver is on schedule.
- How fast the truck is currently traveling, as well as its average speed. This can be very important in that a central part of saving delivery costs is managing gas mileage. A key way to do that is by ensuring drivers stick to an optimal speed.
- Additionally, some systems can actually approximate fair accurately the average mileage a truck is getting based on is overall behavior.
- Some systems can be tied to the car’s diagnostic information to report any possible mechanical faults that might need attention.
- Whether or not a truck is idling, which is extremely costly in terms of gas mileage, and whether or not the vehicle is being driven on off hours, which, of course, they shouldn’t be. Not only is off-hours driving putting wear and tear on a company vehicle, but it is creating a liability risk for the provider.
Cost vs. Benefit
Installation of the systems is relatively simple, and can often be accomplished by mechanical experts on the delivery team. Depending on the system being used, the devices themselves and the installation costs, the cost per vehicle to install a GPS system ranges between approximately $399 and $1,000. Handheld devices are often much cheaper implementations, since no installation is necessary.
However the return on investment by implementing a GPS system can be almost instantaneous given improvements in gas mileage and decreased vehicle maintenance. For instance, GPS-managed fleets often see a reduction in the number of oil changes, because there is improved oversight of the mileage being racked up between changes. Also, if the GPS devices are tied to the vehicles’ diagnostic systems, now the provider is able to read diagnostic codes without having to having to pay for a shop to do it, and can effect repairs before a mechanical problem becomes severe, which means more savings.
Additionally, with the accountability that GPS provides, HMEs can benefit from reduced insurance costs due to the investment in the hard assets that support safe driving policies. Moreover, GPS can aid in recovery of stolen vehicles, which reduces theft insurance costs.
There is another benefit of GPS that is enjoyed by the entire delivery team: an improved workplace culture. While the obvious issues of off-hour driving, taking unscripted detours and long lunch breaks are instantly negated via GPS, real-time information creates a team that is focused on sharpening their game.
Armed with more and better information, HME management can determine how each driver is performing and see which ones need improvement and which ones are the true stars of the team. This not only helps management work with drivers that need help, but it also lets management turn the star performers into coaches that can help their teammates improve their performance. This results in even better delivery performance, improved patient service, and, of course, a bigger benefit to the bottom line.
Points to take away:
- GPS helps providers cut costs through increasing oversight of the vehicle fleet. This means reduced mileage and maintenance costs, as well as gains in insurance costs.
- The systems work by installing GPS devices in trucks or by giving drivers GPS-enabled handheld devices or phones. These devices report the truck’s position at all time.
- This lets the HME provider monitor each truck to see where it is at in its deliveries; what kind of mileage it is getting; the time it is taking at each stop; how fast each truck is going; etc.
- Providers quickly recoup their installation/implementation cost given the gains in reduced overhead.
- Implementing GPS into fleet management also creates a culture shift within the delivery team; helping faltering drivers improve and encouraging good drivers to become great.
This article originally appeared in the July 2010 issue of HME Business.
David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on Twitter at @postacutenews.