The case centers around Knight Transportation, Inc’s efforts to tackle the inefficiencies of its fleet by incorporating new technology such as GPS and devices. By implementing these changes, Knight can obtain greater fleet information and achieve a minimum fuel expense reduction of $1 million, resulting in an 11 percent profit boost. Prior to adopting Fleet View, Knight encountered multiple operational inefficiencies within its fleet. The company grappled with theft problems as criminals would monitor the trucks’ routes and pilfer goods at night when drivers were not present.
It can be a significant loss for the company as the trucking industry struggles with time management. Truckers often have to wait at stores until there is space available to unload the goods they have transported. This results in wasted time. Additionally, there is a lack of communication between truckers and their delivery sites. The company is unaware of the whereabouts of trailers and whether they are fully loaded or empty. This mismatch of resources can lead to increased costs.
With the introduction of global positioning system (GPS), Knight now has access to more information than ever before. Firstly, the company can easily track the location of their trucks using Terion’s product Fleet View. Secondly, with the addition of the Cargo Sensor, the company is able to detect if there is cargo inside the trailer. This information can be immediately reported back to the company when the cargo is empty. Furthermore, the sensor also allows for monitoring of fuel levels and tire air pressure in the trucks, enabling drivers to be aware and maintain their trucks at the appropriate times.
Lastly, the staff at the headquarters can receive comprehensive information about the trucks including their location, movement, and cargo condition, enabling them to detect any theft of cargo. The indicator of efficiency at Knight is the ratio of trailers to trucks, which in the past could not be reduced from 3 to 1. However, in 2002 Knight had a ratio of 4.4 to 1, but now it is only 2.3 to 1. This significant improvement in ratio can explain Knight’s 11 percent profit.
There are multiple methods for a company to gain a competitive advantage, including cost reduction. This strategy can be implemented by Knight to increase sales volume at a lower price without compromising profit margin or quality. As Knight has witnessed significant growth in the U.S. trucking sector, it should align with global trends and improve business performance through technological integration. Additionally, Knight has identified several inefficiencies within its fleet.
Consequently, Knight has introduced GPS and Cargo Sensor as new devices to improve efficiency. This implementation offers various advantages by providing additional information on trucks and fleet. By adopting these technologies, Knight has successfully saved a minimum of $1 million in fuel costs, demonstrating how reducing expenses helps the company gain a competitive edge in this sector. It is widely acknowledged that technology continuously evolves at a rapid rate.
Despite Knight’s utilization of unique devices and software to gain a competitive advantage, other rivals can also adopt the same technology and replicate Knight’s strategies. Hence, if a company fails to enhance its business performance with updated technology, its competitive advantage will not be sustained. Consequently, in order for Knight to retain its advantage in this sector, it should actively seek new opportunities and continually enhance its services. Additionally, it must innovate new features while considering cost to remain at the forefront of the industry.