Welcome to the final article in our series looking at fleet utilization. In our first two articles, we took an in-depth look at the different metrics and methods fleets should use to figure out their proper fleet utilization. Today, we will take a deep dive into the different ways fleets can conduct a fleet utilization study.
Fleet utilizations studies are important because they directly impact a trucking company’ bottom line. They should also be done on a continual basis because fleet needs change all the time. There are common reasons why fleet utilization problems occur. Let’s cover them in more detail and discuss how they can be prevented.
Problems Regarding Fleet Utilization
One of the main reasons trucking companies fail at fleet utilization s because they have insufficient data to understand how their fleets are utilized. They may simply lack the necessary technology or data analysis tools to understand these utilization needs. Fleet management, telematic, and ELD software can assist here, but not all fleets have access to or resources required to obtain these systems.
Another failure in fleet utilization lies in a trucking company’s inability to adjust the size and composition of their fleet to account for their changing organizational needs. They may also have a desire to keep old vehicles in reserve rather than get rid of them. Holding on to old vehicles that are no longer required represents an additional cost. Fleet managers who hold onto them do their fleets no favors.
Sometimes fleet managers like to manage their fleets based on historical requirements or budgets. The problem with this technique is that it does not take the changing needs of the fleet into account. Fleet needs evolve as the operation changes. As such, relying on historical data can prevent fleet managers from accessing the data they need.
Finally, and this is a big one because it can trip up a fleet in so many areas, is the tendency to stick with something because that is the way the fleet has always done it. Sticking with a process simply because it has always been a process is not an effective way to run a trucking company. Smart fleet managers adapt with the times. To stay profitable, that’s what they must do. Now, let’s look at how a trucking company can succeed in establishing a proper utilization study.
The First Steps in Conducting a Proper Fleet Utilization Study
Does your company need a proper fleet utilization study? You may want to conduct one simply to validate your objectives when it comes to vehicle procurement. Whatever your reason may be, it is important to follow an established process with clear objectives. There are specific steps you must take before you just dive headfirst into your study.
First, capture and present vehicle use metrics, which we discussed in Part I and II of our series looking at fleet utilization. This may sound basic, but it is not uncommon for fleet manager to overlook critical components of a fleet utilization study simply because they did not think they needed to evaluate a particular metric.
Fleet managers must begin with a high-level review of the fleet utilization study process. They must capture baseline metrics and make changes to the fleet according to what they find within those metrics. This is a constant process of revision. Here is how the study should proceed:
- Conduct a thorough review of recommended fleet changes.
- Review those recommendations and make the changes accordingly.
- Refine the process and create a timeline for when follow-up studies will occur.
- Create benchmark metrics to weigh your utilization efforts against.
- Make sure you reach your target goals and recommended fleet changes.
In the end, the process of completing a fleet utilization study will be continuous effort. The hardest part of any new initiative is getting started. The good news is you do not need to start from scratch. After all, imitation is the sincerest form of flattery.
Who Should You Trust?
It may be worth it to hire an outside source to conduct your utilization study. Whether you do it internally or outsource it, a comprehensive study will make all the difference in your bottom line. Performing a successful fleet utilization study can be a daunting task. Your alternatives are to take on this challenge using internal resources or use an outside group to help with the effort.
There are some advantages to this process. You can hire a consultant, fleet management company, internal third-party or a business unit within the fleet. Internal third parties know the fleet and are free or low cost. Fleet management companies are objective, but they come with additional cost. Consultants are also high cost, but they are subject matter experts and set their own timelines. If you do it internally, you know your organization best and can conduct it with both time and objectivity in mind.
In the end the subject matter expertise for each segment of your fleet is important. First, experience comes with best practices and benchmarks for your specific type of fleet. An objective perspective of your fleet will also not be influenced by politics or internal influencers. Dedicated resources will also assist in the complete the utilization study even when there are other pressing fleet matters elsewhere within your organization.
The Best Ways to Establish a Baseline
Objective, timely, and accurate fleet utilization metrics are the key to an effective fleet utilization study. If any of these key characteristics of the basic fleet information you use to make fleet changes is questioned, so will the outcomes you generate from your fleet utilization study. So, be absolutely certain that data you collect is believable and valuable.
Start with objectivity. Avoid subjectivity. For example, words like “necessary” and “important” should be avoided. You also want to make sure you document all metrics and avoid ambiguity in your documentation. Avoid paper trails and use technology to capture data wherever possible, whether through GPS systems, electronic log, or fleet management systems.
You also want to ensure your baseline strategy is timely. Ensure that the data for different segments of your fleet are captured for similar timeframes, this way you can create accurate comparisons between vehicle types and subgroups. Also consider fleet cycles when you capture your data. And finally, don’t let your data get stale or old. You want to ensure you are using up-to-date data to make fleet utilization comparisons.
Finally, ensure your baseline calculations aren’t subject to error or miscalculation. You want to ensure your methods are rock solid. If it is too complicated to capture or present, you may want to choose a different baseline metric or change your overall methodology. Data should also be valuable. Do not collect data just for the sake of doing so. And do not expend energy on data or metrics that do not move the needle.
The Best Ways to Capture Baseline Metrics
One of the first challenges fleet managers must contend with when conducting a fleet utilization study is determining which equipment and vehicles to include in the study. You may find that some want to exclude a certain class of vehicle or segment of the vehicle fleet. It is critical you do this only for legitimate reasons. And in the end, those reasons need to be well documented as part of the study.
There are different methods you can use, as we discussed in Parts I and II of this series. From manual observations of your fleet pool to odometers, trip data, fuel usage, work orders, maintenance costs, on-line expenses and much more. The most important thing is to ensure you are making comparisons that are logical and make sense. You want to make apples-to-apples comparisons.
But if you are not using a technological solution, how do you capture baseline metrics? Capturing baseline metrics may not be a one-time event. Most fleets have different demands on their vehicles throughout the year. For example, a county government’s tax department may be very busy from February through April while a university with an agriculture program may be busy in the summer. It is important to capture data that spans the duration of at least one cycle of your data.
In the end, data is critical to ensuring you conduct a proper fleet utilization study. Once you have collected the appropriate data, make a list of recommendations, and set out to implement those recommendations. There may be hundreds of changes proposed. Ensure you conduct a proper review of those recommended changes. Only this way will you finally get your fleet utilization needs under control.