To determine how well something is working, you must track its performance over time and measure it against the industry’s benchmark data. In order to do this, you must first determine what that benchmark data is within your industry and within your company historically.
Fleet management, like many industries, has a set of top metrics and key performance indicators (KPIs) to help measure efficiency and identify cost-controlling benchmarks. Ultimately, this fleet management data will be useful when making important decisions to improve your fleet’s efficiency, productivity and costs and help you make more informed decisions backed by data. Let’s break down what the top fleet metrics and KPIs for fleet management are that you should be tracking.
1. True Cost of Ownership (TCO)
When evaluating the cost of a vehicle in your fleet, think beyond the primary costs such as fuel and maintenance. Consider the total cost of ownership to get your true cost (TCO).
This big-picture amount includes costs such as the original purchase price, the cost of the vehicle’s downtime and the replacement cost. To calculate this, add the original purchase price to the vehicle’s operating costs, then add all of the vehicle’s maintenance costs. This will give you the true cost of ownership for that vehicle.
When you’ve calculated the TCO for your vehicle, track it across your fleet and determine the key performance indicator that will aid in your decision on when to replace the vehicle, or when routine maintenance should occur.
2. Fuel Costs
This is one of the most important costs for fleet management and by far one of the most unavoidable, since fleets literally run on fuel. The top fuel KPI for fleet management is fuel efficiency. Tracking fuel consumption can easily be done using software (such as Azuga Fleet Tracking Software), allowing you to track fuel consumption in real time across all drivers.
This can track fuel costs around the country, and aid in decisions on which routes to take. Fuel costs vary throughout the country, so creating optimal driving routes can cut down on longer, unnecessary driving distances and develop better asset utilization.
3. Preventative Maintenance Compliance Rates
Preventative maintenance sounds great in theory, but unless practiced, is nothing more than that — just a theory. It must be regularly occurring to bear any effect, making it a solid KPI to track. Complying with a preventative maintenance schedule and measuring those efforts can surely increase the longevity of your vehicles.
Preventative maintenance is meant to identify and address issues before they actually occur. Doing small tune ups and cleaning routinely can save you thousands in repair work that is left to fester and isn’t caught over time during those routine checks.
Tracking preventative maintenance (PM) compliance rates helps you understand how effective your maintenance operations are. To calculate a PM compliance rate, simply determine the percentage of work orders that are fulfilled on time.
If you determine there is a low compliance rate, this means your team needs help completing their tasks more efficiently and either requires more training or more staffing help. Tracking the compliance rate will also help you determine your team’s work efficiency, which may reveal ways to improve productivity and streamline processes.
4. Equipment Downtime
Downtime is costly for any company, but if you don’t know how much downtime is actually occurring within your company, you won’t know how much it is truly costing you. Keeping track of this over time can help you reduce oversights and improve processes to better service your vehicles and keep your fleet running.
To best calculate your fleet downtime, you must measure the performance of both your technician’s efficiency and your vehicles. Determine how much time it takes a technician, on average, to perform routine service to a vehicle and get them back on the road. Then take a look at your vehicles and assess whether they experience frequent recurring issues to monitor their overall performance and how long they can last between requiring downtime for maintenance.
5. Road Safety Compliance
When considering road safety compliance, you’ll need to consider the direct and indirect costs involved. At surface level, the direct costs include vehicle maintenance and repair and insurance, as well as any safety-related courses or training your drivers need to maintain certifications and licensures.
The indirect costs you’ll need to factor in are those related to incidents such as crashes — downtime and repair to vehicles, the costs involved in lawsuits and injuries for accidents and repairing any damage to the cargo being transported in the vehicles.
Why Do These KPIs Matter?
Keeping an eye on these key performance indicators will not only help with cost efficiency, it can identify potential safety issues, and even help with customer satisfaction. Streamlining all of these metrics and KPIs into one central location will further your bottom line and produce a multitude of positive results for your fleet management.
Imagine the improvements that could be made when determining more efficient schedules for routine maintenance, or outlining better travel routes for drivers for fuel efficiency. There will be less downtime, fewer costs and happier customers in the end. Try Azuga Fleet Tracking by scheduling a demo and find out how you can start tracking top fleet metrics today. Further your bottom line, and start measuring your KPIs for fleet management.