Evaluating Your Fleet Management KPIs: A Simple Guide
Fleet managers are under constant pressure to calculate the fleet's performance and devise methods to continuously improve the business's productivity and cost-effectiveness. Knowing this, how do you truly calculate fleet performance? What metrics should you use? There are lots of other micro factors that increase the fleet operation cost every year. If your fleet operation costs increase year after year, you need to act quickly to find innovative ways to optimize the cost. One way to do it is by embracing technologies like fleet management software and DSD software. The metrics to calculate the fleet performance should closely align with the strategic objectives of the organization. To develop the business-relevant KPIs, the organization should consider all the internal and external factors that affect the process, stakeholder objectives, and other supporting data. Position your performance calculating metrics close to your company’s core objectives like maximum performance, effective cost management, and sustainability. Also, try to set realistic targets for each KPI and provide your team with the relevant tools and educate them with the skillsets to achieve them.
Identify Your Performance Metrics
Your fleet performance measuring scale is called a metric, and It's essential to define your metric using three key factors:
- Your objective - What you want to measure or achieve
- Quantifiable change -How much you want to achieve
- Time- When and within what time you want to achieve
For example, your KPI performance metric could be improving vehicle utilization (objective) by 10% (Quantifiable change) within the next 12 months (Time).
But you have to measure the supporting factors first to measure the overall KPI.
For Instance, your productivity goals and KPIs can be measured by evaluating factors like:
- Average distance/vehicle/month
- Revenue / mile
- Number of delivery /vehicle
Your safety goals and KPIs can be measured by evaluating factors like:
- Harsh braking events/ month
- Average cost / completed repair
- Accidents/ driver/ month
- Number of repeated offenders /month
Identify KPIs and Thrive with Technology
KPI development and identification is not a one-time task. You must calculative progress and revaluate your fleet management KPIs periodically. Make sure your KPIs always align with your company's core mission and the long and short-term goals you thrive for. Also, the identified KPIs and measures should scale along with your business growth. The efforts and measures you make should evolve with your business objectives. And with the communication facilities and the exposure to data available now, fleet management can evolve faster than ever before.
Make Better Use of the Data
Fortunately, we live in a technologically advanced world with the ability to harness the power of data like never before. Investing in the right technology will eventually benefit your fleet management in the long run. Organizations and fleet managers should take advantage of the historical data and technology available. Beyond the tracking of fuel expenses and mileage of the vehicles, effective measures should be in place to track supportive data like speeding, harsh driving, idling, average time at customer's place and the number of stops along the designated route, etc. The telematics data of all these supportive insights along with your organization's well-defined goals will help you set clear KPIs that boost performance.
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