Most businesses tend to measure the wrong metrics — hence their confusion and inability to achieve satisfactory results.
When logistics firms invest in smart asset tracking technology, they have one goal in mind: stopping their losses. Sure enough, they will succeed in doing that — but that’s not where the biggest ROI is. Most businesses tend to miss out on the bigger picture by focusing solely on asset recovery metrics.
Here’s the discussion you need to have regarding ROI calculation, and what most business leaders get wrong.
The three ways in which you fail to calculate your ROI
01
Calculating only the return on asset recovery
Recovery is quantifiable and tangible. However, greater value lies in hours of labor recovery, lower maintenance costs, and reduced billing times, which don’t appear in a mere “recovered assets” tally.
02
Overlooking utilization information
Fleet operations average utilization of 60–70%. Tracking allows you to know which assets are underutilized, which are overloaded, and which assets you’re renting when you already have them, making the tracking system’s cost exceed its price tag.
03
Neglecting the savings in subsequent time
The hours saved by dispatchers, warehouse supervisors, and drivers not looking for assets multiply quickly. A ten-person operations team saving thirty minutes a day is equivalent to recovering twenty-five hours weekly.
Where the real money is made
The logistics companies maximizing the use of smart tracking technology have the following KPIs in place: asset utilization ratio, maintenance expenses per asset, dwell time at each point, and invoicing precision. Once the assets are tracked from pick-up through delivery, disputes on invoicing virtually disappear — and this factor alone helps to recoup thousands of dollars monthly for even mid-sized fleet owners.
Another underestimated approach to maximizing profitability is predictive maintenance. By having sensors continuously monitoring usage hours and environmental factors, maintenance becomes an issue of scheduling instead of emergency repairs. The industry standard ratio between emergency repair vs. preventive maintenance costs is 3:1.
How AssetTrackPro does it differently: Unlike other tracking solutions providers who sell generic trackers, AssetTrackPro develops customized end-to-end IoT tracking systems for logistics, manufacturing, and healthcare facilities. Its implementations focus on delivering tangible results starting Day One, rather than merely installing tracking hardware.
The right way to make your business case
Before committing to any tracking solution, create a list of the top five pain points in your operations, including financial estimates. Asset loss may be third on your list. The first two are likely tied to underutilized assets or unexpected equipment downtime. Base your business case on that list, rather than on a vendor’s marketing materials.
The logistics companies that are seeing ROI from their smart tracking solutions are not the ones using the fanciest technology. They are the ones who openly admitted to their financial losses and measured accordingly.
Looking to achieve ROI with your asset tracking solution? AssetTrackPro helps logistics and manufacturing facilities across North America deploy tracking solutions based on measurable business results.
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