A lot has changed in fleet management over the last decade. Many fleet operators and managers find themselves grappling with a whole new language—DATA. We’ve been getting a lot of questions around data, analytics, and KPIs recently as fleet leaders set out to learn what metrics they need to track, where to pull that data, and how to use it to drive improvements in their organizations.
So we sat down with three fleet leaders—Marc Canton, Tony Yankovich, and Steve Saltzgiver—to dive into some of the big KPI questions we keep hearing in the field.
Here’s some important advice from our fleet consultants to help you get your fleet on the road to success.
Marc: There are only a handful of KPIs that should matter to all fleets. I’d put those as:
Quite a few other data points are important to some organizations, depending on their industry. For instance, a K-12 fleet will care a lot about driver safety. But this won’t be nearly as high of a priority to government fleets since they don’t manage drivers.
Tony: Fleet operators need to measure performance in areas that have the most impact on their operations. For a company or organization that has to meet specific roll-out requirements (for example a school bus transportation organization) in order to fulfill their mission, fleet availability would be the most important metric. It is also important to understand that you are not going to be able to effectively manage the fleet operation without tracking key performance indicators.
Marc: In my opinion, fleet availability is always the most important metric. What good is it to own or lease fleet assets if they aren’t available for you to use? This applies to any fleet in any industry. And generally, most fleet KPIs should be important for all fleets.
However, the best approach is to pick two to five areas that you want to improve, and then focus on the metrics that help you measure the effectiveness of that part of the program.
So for example, if the feedback you get from your stakeholders is that they hate bringing things to the shop because they never know when they’ll get their vehicles back, measure things that will help you focus on that area such as WO turnaround time, PM compliance, breakdown rate, comeback rate, and perhaps any obstacles the shop as facing, such as time waiting for parts, or for work authorization, etc.
Steve: Transparent reporting processes and regularly sharing performance data with stakeholders can go a long way toward getting the support you need. Learn how to use your data to build your business case.
Tony: Using data to tell your story or provide evidence of performance is critical because it takes the guesswork and politics out of the equation. Providing regular updates on performance provides stakeholders a window into your operation where they can see if performance is improving, declining, or staying the same.
Marc: You have to tell your story early and often. Don’t wait to be asked for a report. Send it out – to customers, leadership, everyone. Organizations consistently reward folks with more resources when they show they have been good stewards of the resources they’ve been provided. So if you want buy-in, use data to prove or support the points you are trying to get buy-in for.
A good example I’ve seen is from a fleet that was having trouble getting folks to be PM-compliant. They needed leadership to put more pressure on operations departments. By comparing the costs of non-PM compliant assets to assets of the same class that were consistently PM compliant, they were able to get buy-in rather quickly.
Steve: Start by identifying your key cost metrics and understand your baseline performance. Then set SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound) goals. Track and share your progress towards those goals, and readjust as needed until you reach your targets.
Tony: You have to pull the data to support decision-making. If you don’t, then your decisions are based mostly on experience and conjecture instead of actual performance. For example, if you are not tracking vehicle utilization you have no way of determining if you really need that asset.
Tony: A consistent and robust quality assurance program is a key element in ensuring that work quality doesn’t suffer when you implement changes.
Marc: Operational efficiency will usually lead to improved quality because effort, time, and money aren’t getting wasted on less valuable activity. Instead, these resources are refocused on more valuable activities. Inherently, if you can’t do something well and efficiently, you should ask yourself whether or not you should be doing it at all, especially when there are vendors who can do it well and efficiently.
Steve: The best way to manage this is by tracking direct labor rates coupled with standard repair times (SRT). Direct labor should be between 65-75% and indirect labor at 25-25%. SRT compliance should be between 90-110% of set task times.
Tony: Fleet managers need to assess both efficiency and effectiveness when evaluating technician performance. Just because a technician is achieving or exceeding their target productivity (i.e., total number of direct labor hours billed in a period) doesn’t mean that they’re a high-performing technician. Consider a technician who reports 8 hours of direct wrench-turning labor on a repair task that should have only taken 4 hours to complete. Conversely, if the technician only takes 2 hours to complete the same 4-hour repair, but the repair was not completed correctly and it results in a comeback, their performance is substandard as well.
Marc: There are a few metrics I recommend tracking to manage this.
With regard to labor costs, I encourage fleets to develop a cost allocation model and update it every year. This lets them see what the fully burdened labor rate should be (even if fleets don’t charge back based on this rate). They can then compare their rates, and identify costs that are contributing to overall costs. For example, maybe IT costs are too high, or they’ve started carrying a large overhead from their central office.
Tony: Managing parts and supplies in an in-house fleet maintenance operation is critical to keeping the technicians fully engaged in maintenance and repair tasks. While there are many inventory management activities that can be measured, the most important include the value of parts in stock per Asset Equivalent Unit (AEU), total inventory turns in a year, percentage of parts issued from stock, parts obsolescence rate, and inventory accuracy.
Tony: Strategic fleet replacement guidelines should include utilization and age. This provides an organization with the ability to develop multi-year fleet replacement plans to allow capital asset replacement budgeting. On a tactical level, deciding which asset to replace this year should include age, utilization, condition, criticality and ability to meet its intended mission, and life-to-date and recent maintenance and repair costs.
Marc: To add to Tony’s response, on the tactical side there’s also the matter of supply chain issues in which assets that should be replaced may not be available to be replaced, which will require an adjustment on the fleet’s part.
On the strategic side, a good metric is “life utilization percentage” which tracks the amount of the asset’s utilization against the amount of utilization it should have based on its life cycle. For example, if you decide that a good life for a vehicle is 10 years and 100,000 miles when you own the asset for three years you want to be at about 30,000 miles.
Now, the real question is, “How do you know what an asset’s life cycle should be?” While most folks are simply guessing based on experience or by looking at what their neighbor is doing, this can and should actually be calculated empirically. You need the following data elements from a robust set of assets all in the same class.
Steve: Fleets have far more visibility to Telematics data and driver behavior driving metrics (e.g., engine idling, hard stop, fast acceleration, seat belt use, utilization, etc.). But they’re really only looking at and using it if monitored and pushed by supervisors.
Tony: Fleet data comes in many forms. Fleet managers are using data to formulate replace versus repair decisions, justify technician staffing requests, conduct predictive analytics to determine when an asset or component is likely to fail and determine the competitiveness of the operation in terms of cost and service levels. The use of fleet telematics has exploded over the past 5 years or so. This data is being used for more efficient routing, tracking driver productivity, ensuring safe driver habits, and protecting the organization against wrongful lawsuits in the event of an accident.
Marc: While fleet operators have access to much more data, I don’t think the needle has moved much in terms of how they’re using data, unfortunately. They are certainly becoming more aware of the need to leverage data, but often lack the resources or expertise to go much further. This is where fleet management consultants can help.
Steve: Fleet managers often lack the knowledge and experience to understand what should be tracked, reported, and used for continuous improvement.
Tony: It is easy to get overwhelmed when looking at and interpreting data. If an organization is using a true fleet management information system and not a generic work order system, there are literally hundreds of metrics that you can report on. An FMIS can cover everything from asset utilization to shop productivity to the total cost of ownership. However, we caution fleet managers and other decision-makers that it’s more important to track and report on the critical few and not get lost in the immensity of the trivial many.
Marc: Most fleet managers just don’t know what to do with their data. They’re suffering from what I call “Information Overload”. They have access to more data than they know how to use, and so little actually gets accomplished. The key piece that most seem to skip is creating and following a fleet management data plan.
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If your fleet is at the beginning of its data journey, or even if you’re a few years in but are still struggling with using data to drive better fleet performance, connecting with our fleet experts can be a real game-changer. Marc, Tony, and Steve offer KPI assessments to make sure your KPIs are hitting the mark. Learn more here.
In the meantime, follow our weekly podcast, The Fleet Success Show, for real talk about the fundamentals, standards, and best practices that empower today’s fleets.