Credit crunch forces companies to reduce their expenses and find alternative ways to earn profit. „One possible solution would be to know exactly where the company vehicles and employees are and what they are doing, “advise Reigo Rusing and Silver Laus-the CEO and marketing managers of GPS surveillance company Navirec. Today, Estonian companies own around 50 000 small vehicles, 20 000 transporters and 80 000 trucks. Rusing said only 10% of the market is currently using GPS surveillance: „At least half of the vehicles could benefit from monitoring, but Estonian tracking companies have sold only around 6000 controllers so far.“Fortunately the times when people think surveillance means protecting your vehicles from theft only, are over. The public has now started to realise the benefit of being able to plan the routes and working hours,” said Laus. Rusing: “People are already comparing the companies and taking offers from every surveillance company, before deciding” Laus: “The question often is where to start? Which expenses have to be scraped first? In most cases it cannot be the product itself but have to be saved in the production process or delivery. For example, one of our clients was able to reduce the expenses on fuel by a quarter-the drivers stopped using the vehicles for personal use, no fuel thefts happened, and jobs got done in less time. Also, as they now did more work every day, the profits from sales also went up. Another company managed to raise the sales profits by 25%. They make 200 million kroons every year. The gained profit, which they earned after installing Navirec, seems like a very good deal considering they pay 3000 kroons a year for the surveillance. The investment is often of no consequence.” Rusing: “Often the wrong people get blamed-like drivers. But without the system they have no real means to plan their routes. In most cases, after the installation of the devices, the routes are reconsidered, and many kilometres are saved. Sometimes it will reveal that some deliveries cost more than the profit from the delivered goods will be. The analysis will have to be done by the companies, but the data for it comes from the system and gives at least 80% required data.” “A year ago our clients had an average of 3 vehicles per client under surveillance. Today that number is 9. Numbers speak for themselves. The minimum expenses per unit (driver and vehicle) is around 30-40 000 kroons a month. Considering the surveillance fee is around 15 kroons a day- that would be the price for 1 litre of fuel. Again, the investment seems insignificant considering the benefits. To earn back that investment, the unit would have to operate 1% more efficiently, “explained Rusing. Rusing: “Most clients come to us with a worry that their employees steal fuel. After the analysis that problem will often end up at the bottom of the list. More efficient routes and lost profits from sales will become quickly more important issues. “ Laus said the clients seem to come to them in waves, the first one last Summer, when the fuel price went up. Second one late Autumn when the credit crunch arrived at its hardest. Last year Navirec´s turnover increased 300%. Today they have over 1000 vehicles under surveillance. They are in negotiations with 10 other countries for export purposes and already doing very well in Latvia. “It´s interesting that the main argument for not choosing to track the company vehicles is that their sales team has a good motivation package and so it is up to sales person how much he wants to earn,” said Rusing. “But why accept less when you could earn 25% more? Today these people who claimed that are some surveillance companies clients,” added Laus. The system works on the GPS. Devices installed to the vehicles send data to the main server in every 5 seconds. The users can go online and see the vehicle moving in real time and later print out statistics of speed, time, fuel consumption ect. Additionally they have made many times special solutions for specific client needs. A report in pdf format can be printed and added to the invoice to explain the payer where the expenses come from. The documents in paper form seem to disappear quite quickly nowadays. Already many companies use digital delivery reports and it is possible to send out the invoice for delivered goods and even receive payment before the unit gets back to base. “Brilliant innovation ideas often come from our own clients. We´ve been asked to develop systems that calculate how many products per kilometre the unit delivers. They can then set up rankings for sales people and see what might be wrong with the routes of the less successful units,” said Rusing. Source: www.logistikauudised.net
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