It’s been said, “That which is not measured does not improve.” This is particularly true in business. Organizations of all sizes and across all industries put significant effort into quantifying, tracking, and measuring their success. And generally, this means identifying and understanding their most-relevant key performance indicators (KPIs).
What Are KPIs?
KPIs are measurable values that help businesses track progress toward specific goals. These values indicate how effectively a business is achieving its objectives and provide insight into what areas may require improvement. Properly setting KPIs is a crucial aspect of measuring the success of a business and keeping everyone involved on the same page. But what makes a good KPI?
Although KPIs can be as unique as the businesses that track them, a good KPI is one that adheres to the SMART philosophy. This means that every KPI, regardless of what it actually tracks, needs to be specific, measurable, attainable, relevant, and time-bound (SMART). In other words, for a KPI to be valuable, it must not only be something that can be measured, but also something that can be accomplished within a specific time frame.
With this definition in mind, how should businesses approach fleet management success metrics?
The 11 Most Essential Fleet Management Performance Metrics
Fleet metrics are those KPIs that relate directly to the performance of your fleet vehicles and their operators. By tracking the right fleet management performance metrics, organizations can lower their liability risk and optimize returns on investments relevant to fleet ownership and deployment. And, thanks to recent advances in portable digital technology and internet of things (IoT) connectivity, collecting reliable fleet data has never been easier.
Here, we explore the 11 most essential fleet metrics categories to help drive your success:
Accidents and Safety
Accidents involving your fleet are the ultimate unnecessary cost and can end up hurting your equipment, endangering your people, and causing irrevocable damage to your reputation. Unfortunately, accidents do happen, but with the right fleet metrics, you can develop a clear picture of why and when they are happening so you can take steps to minimize your risk. Top fleet management tools can track which driver is responsible for which vehicles during which times, allowing you to track metrics about driver behavior and identify potential problem areas that might otherwise lead to fines, liability, or worse.
Asset Utilization
There are many costs associated with building, deploying, and licensing a fleet of vehicles, and if that fleet isn’t operating at or near full capacity then you aren’t earning back as much of your investment as you could be. Asset utilization is a fleet management metric that tracks the miles a vehicle covers and the hours per day it is in operation. This not only makes it possible to identify under and over-utilized vehicles so that you can scale your fleet to better meet demand, but it also makes it easier to keep up with maintenance schedules.
Driver Assignments
Drivers play an essential role in fleet operations, and their productivity and habits should always be a major consideration. Tracking driver location, mileage, travel durations, and overall utilization helps you identify strengths and weaknesses among your vehicle operator. These metrics also give you actionable insights into which drivers are best suited to specific assignments.
Fuel Management
Fuel is the biggest ongoing fleet-related expense that you will likely need to account for. It’s also extremely unpredictable, capable of fluctuating wildly over short periods of time. As such, it is vital that you keep a close eye on your fleet fuel costs and fuel economy in real time. Fuel management metrics help you identify and eliminate fuel-wasting behavior, discover possible fuel inefficiencies in your vehicles, and even plan for the cost-per-mile of upcoming assignments.
Inventory and Parts
Although scheduling preventive maintenance can help minimize fleet downtime, there will likely be occasions where unexpected mechanical failures put one or more of your vehicles temporarily out of operation. When this happens, having an accurate inventory of on-hand parts helps ensure that you have the replacement components you need to get your fleet back on the road. Track your inventory quantities so that you never have to worry about being out of stock of essential replacement parts.
Odometer Data
Sometimes the most basic metrics can provide the most actionable data. Odometer readings indicate how many miles/kilometers a vehicle has traveled. This information is essential for scheduling preventive maintenance, determining when to retire and replace vehicles, and better manage your fuel costs.
Preventative Maintenance
It’s always better to address an issue before it can grow into a problem, and this is where preventive maintenance comes in. When handled correctly, preventive maintenance can dramatically increase the lifespan of your fleet while also reducing the costs of repairing and replacing failed parts. Preventive maintenance ties closely into several of the other metrics in this list, but should also be tracked separately as its own, specific KPI to ensure that every vehicle in the fleet is keeping up with its maintenance schedules.
Repair Turnover
When vehicles go in for repair or maintenance, they naturally experience downtime where they cannot be utilized to earn revenue. Monitoring the time your vehicles spend in the repair shop by tracking start and completion dates helps you identify any areas in your maintenance procedures that may be improved, so you can get more utilization out of your fleet.
Technician Productivity
Going hand in hand with repair turnover, technician productivity describes a range of metrics used to evaluate how service and maintenance tasks are being completed and the costs of each. These KPIs are vital even if you outsource maintenance and repair work to a third party, allowing you to quickly evaluate, compare, and manage the costs of various tasks before you commit to having them done.
Telematics
Telematics — a combination of telecommunications and informatics — uses GPS and other technologies to track the location of your vehicles while also sending and receiving telemetry data. These metrics can be applied to provide real-time fleet visibility, a clearer understanding of driver productivity and behavior, and insight into the efficiency of specific vehicles and their components.
Vehicle Replacement
Generally, it is more cost-effective to repair a vehicle than to replace it. But things aren’t always so cut and dried; when vehicles are continually repaired and remain in operation longer than they should, it can have a detrimental effect on performance and increase your costs over time. Vehicle replacement metrics (such as service history, telemetric data, and asset utilization) will help you determine when it is the most cost-effective to continue maintaining a vehicle, and when it’s a better option to simply replace it.
Fleet Management Metrics Improve Performance
Taken altogether, these categories of fleet management metrics are essential for setting and tracking the goals fleet managers use to define their success. This allows businesses to improve in the following areas:
- Customer Service
The KPIs you track and the goals they support all tie back into one, all-encompassing mandate: To better serve your customers. By improving your operations you reduce the risks of missed deliveries and unfulfilled expectations. - Driver Safety
Any time a driver takes a vehicle out on the road they are putting themselves and others in danger. Fleet metrics help decision-makers more easily identify and mitigate this danger, encouraging best safety practices and dialing in on mechanical problems and poor driving behaviors before they can lead to accidents. - Fuel Costs
Fuel costs may seem like something you don’t have much control over, but with a clear understanding of the right data, you can take steps to improve fuel efficiency for your fleet. This can include everything from identifying which vehicles achieve lower miles per gallon and why to creating more-efficient routes to get your fleets to where they’re going at a lower cost. - Route Efficiency
Route efficiency is tied not only to fuel costs but also to the costs associated with asset utilization and maintenance scheduling. Applied correctly, real-time telematic data can be used to map routes that take into account driver scheduling, time spent on site, and any unexpected road hazards that may occur. - Vehicle Productivity and Lifespan
Your fleet can’t function optimally unless each vehicle is operating as expected. Fleet management metrics provide insight into how best to coordinate and schedule maintenance and repairs to reduce the negative impact of downtime. Additionally, telemetric data can quickly identify problems with individual vehicles to help reduce the chances of experiencing breakdowns. As a result, those organizations that make tracking fleet metrics a priority enjoy longer, more profitable vehicle lifespans.
The Road to Success
Success can be difficult to obtain — or even recognize — without the right KPIs. Identifying, measuring, and acting on reliable fleet data gives your business information it can act upon to streamline your fleet operations. Fleet management metrics play a vital role in fleet operations.
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