Ensuring your fleet is running smoothly and efficiently can be a challenge for even the most seasoned fleet managers. There are many moving parts to keep track of, and it can be difficult to determine which metrics are most important to focus on.
Using fleet reporting tools is a great place to start. But if you're not sure what data you should focus on and what key performance indicators (KPIs) you should monitor, it'll be difficult to make the informed decisions to optimize your fleet's performance. Because after all, it is only possible to improve what we are able to measure.
To help you, we have compiled in a single list the 9 performance indicators that every fleet manager should monitor to ensure its effectiveness.
Total Cost of Ownership (TCO)
One of the most important fleet metrics to track is the fleet's total cost of ownership (TCO). TCO takes into account all costs associated with operating your fleet, including purchase price, depreciation, fuel, maintenance, and repairs.
To calculate TCO, you first need to add up all of your fleet's operating expenses over a given period. Once you have this figure, you can divide it by the number of vehicles in your fleet to get its average TCO.
Tracking your fleet's TCO will give you a good idea of your fleet's operating cost per vehicle. This information can be useful in making decisions about expanding or replacing your fleet.
Using data relating to your fleet, good fleet management software can calculate the TCO directly for you. This will save you valuable time and allow you to verify that your TCO calculations are accurate.
Use of equipment
Equipment utilization or asset utilization is another key metric that fleet managers should track. Investing in your fleet involves high costs, so it is important to ensure that it is fully exploited.
Calculating equipment usage can be done in different ways. One is to take the actual number of hours your fleet was used during a specific period. Then you divide that number by the total number of hours your fleet could have been operated.
For example, let's say your fleet was in service for 8,760 hours per year (24 hours per day, 365 days per year). If your fleet capacity is 10,000 hours, your fleet's equipment utilization, in this case, would be 87.6%.
Another way to calculate equipment utilization is to consider the number of miles traveled by your fleet during a specific period. Divide this figure by the total number of miles your fleet could have traveled and you will get the equipment utilization percentage.
For example, if your fleet drove 100,000 miles in a year, and could have driven 120,000 miles in total, your fleet's equipment utilization would be 83.3%.
Tracking the operating rates of construction equipment or machinery is essential as it can help fleet managers identify opportunities to improve their utilization. For example, if you notice that one of your vehicles or machines is only being used for a few hours per week, you may want to consider renting it out or selling it.
Preventive maintenance
Keeping up with preventive maintenance is essential if you want to avoid costly repairs, especially when it comes to construction machinery. This parameter measures the percentage of vehicles in the fleet whose routine checks are up to date.
To keep track of preventive maintenance, you should start by establishing a schedule for each vehicle in your fleet. This plan should be based on the manufacturer's recommendations and the specific needs of each vehicle.
Once you've established a schedule, you can use fleet management software to find out when each vehicle is due for service. This will allow you not to miss a scheduled deadline, and thus keep all the vehicles in your fleet in good working order.
Odometer or orometer readings
Odometer readings provide you with valuable insight into the wear and tear of the vehicles in your fleet. On the other hand, odometer readings tell you how long your machine's engine has been running. This tracking can help you decide when to replace or trade in machines or vehicles in your fleet.
To keep track of odometer or speedometer readings, you need to take manual readings and enter them into fleet management software. Fortunately, some fleet monitoring system like Wialon come with GPS tracking devices that automatically capture this data. Not only does this save you a lot of time, but it also ensures that your readings are always accurate.
Driving behavior of drivers
Driver behavior represents one of the most important parameters to monitor for a fleet. It measures how safe and efficient your drivers are and includes things like hard braking, sudden changes of direction, rapid acceleration, idling and speeding.
To calculate it, you must record for each of your drivers the number of accidents, traffic violations and near collisions in which they were involved. By dividing this number by the total number of kilometers traveled, you will obtain the driver behavior rate.
Monitoring and identifying habits that can harm the driver and vehicle is essential to maintaining safe fleet operation. Without forgetting to point out that driver behavior has a considerable impact on operating costs such as maintenance costs and fuel consumption. Fortunately, you don't have to take these readings and measurements manually, as good fleet delivery tracking software does this using data provided by GPS tracking devices.
Fuel consumption
Fuel is one of a fleet's biggest expenses, especially in today's economy. It is therefore essential to monitor your consumption to ensure that you do not generate excess spending. Measuring fuel consumption manually is a waste of your employees' time, as this method can be both inaccurate and time-consuming. Instead, use fleet management software that can be connected to GPS tracking devices to automatically track fuel consumption.
To start, you can assign a fuel card to each vehicle in your fleet. Every time a driver buys fuel, they will need to use this card. The fleet management software will then automatically track and record the purchase. It is true that many companies already use fuel cards for their employees, but the data on these cards is often incomplete or incorrect, which is something that good fleet management software can also remedy.
Once you have all the data on your fuel consumption, you can start thinking about different methods to reduce it. For example, you can consider implementing a fleet-wide fuel consumption reduction policy or investing in vehicles that are more fuel efficient.
Vehicle replacement
If your vehicle remains in service beyond its useful life, it can lead to reduced asset performance and increased operating costs. That's why it's important to keep a close eye on your vehicle replacement rate.
To calculate it, you must take into account the average lifespan of vehicles in the fleet and their depreciation rate. This information will help you determine when it is appropriate to replace each vehicle in your fleet. They will also help you establish replacement budgets for your fleet and ensure that you do not incur excess expenses on the purchase of new vehicles.
Like most other fleet metrics, you can track this information manually, but fleet management software makes it easier. With software like Wialon, you can set up alerts that notify you when it's time to replace a fleet vehicle.
Tracking travel times and delays
Another metric that fleet managers should monitor is tracking journey times and delays. This metric tracks how much time fleet vehicles spend on the road and how often they experience delays due to traffic, weather or other factors. It can also measure the number of hours certain machines have been used.
To calculate this metric, you will need to count the number of hours each vehicle in the fleet spends on the road and the number of delay incidents it experiences. By dividing these two numbers, you will get the tracking rate for travel time and delays.
Accurate tracking of journey times can help you optimize your fleet's routes and ensure your vehicles are being used efficiently. It can also help you identify fleet vehicles that are frequently delayed or machines that are not being used on job sites, and determine the reasons behind these incidents.
Fleet management software can help track travel times, delays, and idle assets like machinery and equipment.
Performance indicators
So far, we have discussed a series of parameters essential to good fleet management. It is important to put them together to measure the overall performance of the fleet. By reviewing real-time and historical data, you can identify trends in fleet performance and take action to address them.
Pay particular attention to overall productivity, fuel efficiency, fleet utilization and fleet downtime. All of these factors play into fleet performance and equipment downtime and must be closely monitored. By compiling all essential metrics in one place, fleet management software can make it easier to track fleet performance and identify problems early.
It is obvious that a fleet's performance is measured by the quality of its manager. Ultimately, it is up to you to ensure that your fleet operates smoothly and efficiently.
How to use fleet data to improve fleet operations and performance?
Now that you know what fleet metrics to track, it's time to put that knowledge into practice. The first step is, as you probably guessed, to start using fleet management software to collect data. This data will be essential for monitoring the performance of a mixed fleet and making improvements.
Once you have gathered all the necessary data, you can start thinking about ways to improve your fleet operations. Here are some ideas on how to do this:
Regularly analyze fleet data to identify areas for improvement
Compare fleet performance data with industry standard benchmarks
Optimize routes to reduce vehicle and machine downtime and fuel consumption
Monitor driver performance and address potential issues
Invest in fuel-efficient vehicles to improve fuel efficiency
Monitor fleet usage and make necessary changes
These are just a few of the different ways you can use your fleet data to improve performance. Of course, you'll need to tailor your approach to your fleet's specific needs. But if you use the right fleet management software, you'll have all the data you need to improve your performance. And with just a little effort, you'll be well on your way to running a more efficient and successful fleet.
The importance of reporting in fleet management
Fleet management tools can go a long way in improving fleet performance. But ultimately, we all realize that simply purchasing software is not enough to keep a fleet running smoothly.
This is where fleet reporting comes in.
First, it allows you to track progress over a period of time. This is important for identifying trends in fleet performance and making improvements. Second, reporting provides you with the data you need to make decisions about your fleet operations. And finally, fleet reporting can help you hold employees accountable for their performance. Without accurate and timely reporting, fleet managers would be flying blind and likely making many easily avoidable mistakes.
We recommend that, if you are not already doing so, you start tracking and reporting on the metrics we have listed above. This will help you optimize your fleet and improve your results.
Conclusion
The market offers a wide variety of fleet management systems. However, not all are equal. Some are very basic and only track a few of the metrics we discussed previously. Others are much more developed and track a large number of parameters. When choosing a fleet management system, consider one that is comprehensive in features and easy to use.
