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What is a Fleet Management System?

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  • Written By: Justin Cupler
  • Edited By: Angela B.
  • Last Modified Date: 28 October 2016
  • Copyright Protected:
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    Conjecture Corporation
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A company may need a large fleet of vehicles, but it can be difficult to maintain that fleet. This is the main function of a fleet management system, which takes the company's vehicles and organizes them to give the company vehicle tracking abilities, maintenance schedules and other basic fleet necessities. Fleet management systems can also provide the vehicles for the company if the company doesn't want to buy its own.

The most important facet of a fleet management system is the tracking of vehicles. These systems track actual vehicle location, fuel economy, average speed, and estimated time of arrival (ETA). They also know which company employee has the vehicle, when and sometimes why; ensuring that a vehicle is available when an employee needs one is another key function. This information is compiled and analyzed by the fleet management system, which then may make suggestions about how to improve efficiency or fuel economy. This system can also track a vehicle if it is stolen, but it may also be used as a GPS to track the driver.

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Fleet management systems are sometimes responsible for scheduling and approving vehicle fuel, maintenance and repairs based on the company's budget. These companies issue a small card or a booklet with a list of scheduled maintenance and approved repairs. Typically, these fleet management systems will have a set dollar amount for repairs that is pre-approved and does not require any authorization. A fleet management system may also issue a credit card for employees to use for fuel purchases at approved vendors.

Over time, all vehicles depreciate in value. Part of the fleet management system's responsibilities includes calculating this depreciation over the year and determining when it is time to purge that vehicle from the fleet. Fleet management systems often have connections with auto manufacturers to trade in the fleet vehicles and add new vehicles to the fleet at a discounted rate; they also can offer vehicle financing for the company.

In companies where driving is part of the daily task, many employees are reimbursed for their travel at a per-mile rate. The fleet management system becomes responsible for tracking this mileage. This eliminates the need for the employee to worry about a company shorting his mileage because of a missed entry in a log book. This also keeps track of miles driven per year to help calculate the depreciation of the vehicle.

The fleet management system often tracks these vehicles through a special computer installed in the vehicle. This computer connects to the fleet management computers via satellite communication and transmits all of the pertinent information. The proper use of the information provided to the fleet management system will help the company save money and streamline the management of its large fleet of vehicles.

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