Speaker: Thabo Ledwaba: Distribution Excellence Manager: CCBSA
Event: Vehicle Telematics and Intelligent Mobility Conference
Date: 17 – 18 October 2019
Good morning ladies and gentlemen.
It is a great pleasure to be here with you today to share the Coca-Cola Beverages South Africa (CCBSA)’s perspective on technology adoption in a fast-changing logistics environment, as we seek to mitigate against the various challenges that beset our unique South African market.
According to a Berg Insight report, the penetration rate of fleet management systems in non-privately owned fleet vehicles used by businesses is estimated to reach only 32.5% by the end of 2020.This means that two thirds of fleets on the roads run without telematics.
This leaves a huge opportunity, where we can save costs and improve efficiency on South African roads, but don’t.
The South African economy is undergoing a rapid shift as we come to grips with the impact of the fourth industrial revolution in every aspect of our lives.
Artificial Intelligence, Machine Learning, Automation and Fifth Generation (or 5G) Telecommunications Technologies are poised to help connected vehicles interact more seamlessly with drivers, controllers, other vehicles and the surrounding environment, ensuring better oversight and influence.
Self-driving vehicles will be a reality on South African roads sooner than we think. In fact we already have trials of 100% electronic vehicles taking place.
While these technologies are exciting and set to introduce new efficiencies into both fleet and individual experiences, they need to be adopted with an understanding of the current developmental journey that our country is on.
Modern fleet management systems offer a wide range of smart tools and applications.
Integrated systems currently available enable businesses to track vehicles and traffic in real-time to make quick adjustments and, communicate with drivers, gain live visibility of vehicles and monitor a range of diagnostics, such as fuel levels and tyre pressure.
Cloud-based solutions and applications enable control centre operators to manage fleets via decentralised networks. This increases system redundancy and data resilience, vastly reducing loss of vital information about operations. If one server goes down, another is there waiting to take its place in a seamless handover of data.
Computer aided driving and safety systems protect not only the driver, but other motorists and pedestrians on the road. This is a huge improvement from just a few years ago.
If an accident happened in the past in most of our areas of responsibility, one would have to wait for various second-hand accounts from drivers and other witnesses before a full report could be compiled.
Paper-based logbooks were unreliable, inaccurate and open to abuse, exposing businesses to insurance risk, as well as other operational challenges.
Now, if an incident happens, you can see exactly what caused it in real time, and extract accurate, detailed reports almost instantaneously.
Critically, driver behaviour can be monitored continuously, so that adjustments can be communicated proactively, vastly reducing the risk and frequency of accidents in the first place.
The operator receives an alert if a driver makes an unscheduled stop, or suddenly goes off the defined route.
Immediately, an agent can contact the driver and make alternative plans in the event of weather issues, protest action or road works, for example.
Five years ago, we would experience multiple incidents every week ranging from low to high impact yet an incident in anyway. This was accepted as normal, but it had a very real and detrimental impact on our business costs, reputation and long-term sustainability.
No matter how small an incident, if it happens frequently enough without instant intervention, is a risk to the business.
Today, most minor and major incidents can be managed even before they happen through this incredible fleet management technology. The result is that we have brought our abuse and insurance excess costs down by as much as 45% in past 2 years months.
Our current vision is to move to the next phase of this technology, where these tools are becoming integrated into a single platform.
Instead of paying different suppliers for each part of a system, solutions are now built with all these components designed together, as well as the ability to plug into third-party applications for backward compatibility.
Overall, this ability to build a clear, sound picture around logistics operations is vital to a company such as ours. It allows us to have better business foresight and to attain compliance with environmental and labour regulations, as well as helping us reduce losses and manage our reputation, as our customers know exactly what to expect.
The technology empowers us to reassure customers, so they can also plan better and don’t have to hold excess inventory, as they know that we are reliable.
However, in the South African context, the challenge many fleet managers grapple with is cost. Fast increasing fuel costs are squeezing overheads and new technologies are often met with scepticism, especially expensive ones.
Not everyone fully understands the potential benefits of paying a monthly fee for a fleet management system yet and that is where we need to start.
As innovation accelerates at breakneck speed, we have to avoid the temptation of pushing for the brightest and shiniest systems as soon as they are released.
For instance, do you really need to pay a premium subscription on a system because it comes with remote start, lock and kill switch?
Can I afford to add 10% to my fleet management system cost because a newer version has a stop light camera warning?
Maybe the answer is yes, and sometime down the line, when these features become more commonplace, they will give operators a much-needed competitive edge.
Until then, however, in the current climate, we need to come to grips with the core features that will drive real efficiency today.
We mustn’t be so excited by the bells and whistles that we overlook the fundamental requirements of fleet managements systems.
For instance, an activity playback feature might be useful in labour disputes and other investigations, but make sure to first setup basic features, such as electronic fuel monitoring.
A good rule of thumb is the eighty-twenty principle – focus your spending on 20% of the tools that you use 80% of the time.
alternately, 80% of your system’s tools might be really amazing and cutting edge, but you might find that they only increase your costs, and very rarely (20%) do they result in real, sustainable improvements in efficiencies.
You need to focus your spending on the most vital tools whatever those might be for your business.
Wireless networks in South Africa still have some way to go, so paying an extra 25% to take your 10 second updates to 5 second updates might actually not change much, except to put a squeeze on your cash flow.
The point is don’t be technophobic—transport operators across the economy need to realise the benefits of integrated telematics systems.
However, a measured approach needs to be adopted, ensuring that the basics are well established and understood, before moving onto more advanced features that may or may not be applicable in your business and the local market.