Operational efficiency is kind of a broad phrase, but there are three key areas it affects: productivity, profitability, and overall operating costs. Monitoring these can give you a better idea of process inefficiencies in the fleet and what’s causing them. If productivity is down, for example, there may be an issue in the shop slowing down asset maintenance and repairs and increasing unscheduled downtime. In a recent episode of The Fleet Code podcast, Bill Spare, Fleet Manager for Town of Apex in North Carolina, discussed how to identify inefficiencies and steps fleet managers can take to correct them.
Assess the State of the Operation
Oftentimes, operational inefficiencies are felt before they’re measured, as they can cause employee — and customer — frustrations and throw off daily workflows. Once an inefficiency is determined, it’s important to understand how it affects employees. Is this an ongoing issue or something new?
“When I first started my position, like everybody, they’re really excited to come in and make a difference. I was in a newly created position,” says Spare. “The town has been growing rapidly, so there’s now a need for a fleet manager. But luckily, I kind of had the wherewithal to step back, kind of take a breather, and properly assess the fleet. One of the first things I did was I conducted one-on-one interviews with my staff and some of the end users of our vehicles.”
“When talking with the internal employees,” Spare continues, “my big drive was to really just figure out some of the concerns and problems that they were facing on a daily basis.”
Another benefit of employee feedback is that it makes finding the source of process inefficiencies easier, so listen to your team to learn about their experiences and uncover what excites and what frustrates them — and then try to address the frustrations meaningfully.
Image: Fleetio
Use KPIs to Track Success
After you’ve identified operational inefficiencies and talked with your team, you can develop a plan for improvement. You’ll also need a way to measure the success or shortcomings of that plan, which can be done by using key performance indicators (KPIs) specific to your goals.
If your goal is to control fleet costs, for instance, you can measure that by tracking the total cost of ownership (TCO) for each fleet asset. Tracking TCO allows you to see which assets are cost outliers, and you can use that information to hone in on the source of inflated spend, be it unplanned breakdowns, poor driving practices, or recurring mechanical issues. Alternatively, if you realize that your fleet could do a better job of sticking to maintenance schedules, start tracking your on-time maintenance compliance.
For Spare, he realized that one of the gaps in the Town of Apex was finding the right time to retire or replace an asset in the fleet. “[An] important thing that I kind of dived into was the asset replacement scheduling,” Spare explains. “How often are vehicles being replaced? Are there set replacement schedules? Has the fleet been following those replacement schedules? And if not, how much money is it going to take us to catch us back up to it?”
With that goal in mind, Spare checked out the fleet’s data to see what corrective actions he could take. “One of the big things that I started looking into was the operating costs of these vehicles to determine the cost per mile,” Spare says. “You have to have a good understanding of the vehicle service history, how much parts, how much labor, some of the additional costs — such as vehicle registration, insurance — all that stuff goes into that calculation.”
Spare was also interested in improving maintenance compliance to reduce the amount of unscheduled breakdowns that happen in his fleet. “We use the work orders created in [our fleet optimization platform] so everything is determined either to be scheduled or unscheduled,” Spare explains. “So it’s really easy to come up with what our ratio is. Our ultimate goal is to have a ratio of 80% scheduled to 20% unscheduled because, in my experience, I’ve seen that some of the unscheduled repairs can be almost double the price of a scheduled repair.”
It’s worth noting that multiple data points work together to make up the KPIs you’re tracking, and sifting through large amounts of data can be exhausting and not always the best use of your time. That said, having a system in place to measure your progress allows you to both see and show the impact of your efforts. Fleet technologies like optimization platforms, maintenance software, and telematics can make data collection and analysis simpler, but fleets using more manual data tracking methods like spreadsheets can still benefit from tracking goal-related KPIs.
Lean on Industry Experience
It can sometimes feel impossible to see where your fleet is lagging if you’re living in isolation. For Spare, industry trade shows and conferences have been key in broadening his fleet management skills. “I’ve attended numerous fleet conferences and trade shows. I highly recommend anybody in the fleet industry to try to attend as many as possible,” says Spare. “They’re great places to see the latest trends in the fleet industry. Technology improves so fast that that’s really where they can demonstrate the new technology that’s out. It’s also a great place to meet and talk with your vendors, some of the vehicle manufacturers.”
Schedule time for conferences or download industry benchmarking reports to see what other fleets are doing and to see how yours stacks up. But, again, before implementing changes, take the time to assess the current state of your fleet, and make specific goals —with related KPIs — so you can track the effectiveness of your strategies and ensure your efforts are making a tangible impact.
Author: Rachael Plant, senior content marketing specialist for Fleetio.
