Why monitoring fleet data is essential to managing costs
Written by: Simon Pavey, Last updated:10th September 2024
This is the sixth in a series of articles written with our partners at FleetCheck to help business owners and managers understand their legal requirements around managing staff that drive for work.
If your business activities require the use of vehicles, the cost of running those vans, lorries or cars is significant and probably second only to payroll. For any business looking to control operational costs, fleet is one area where it’s possible to make big improvements in cost efficiencies.
Identifying and controlling costs that are unnecessarily high means you need good data. It can be tempting to gather and act on as much data as possible, but this is really a case of quality over quantity, otherwise you can end up with a confusing picture and no clear priorities. It is often better to focus on a smaller number of important fleet metrics which are likely to achieve the greatest savings.
The four primary metrics you should be looking at are:
■ Fuel
■ Service Maintenance Repair (SMR)
■ Vehicles
■ Driver behaviour and incident record
Fuel metrics
Fuel can often represent around a third of a fleet’s operating costs and, with the recent huge rises in prices, controlling fuel spend is a priority.
The two key fuel metrics to track are fuel consumption and cost per mile for both individual vehicles and individual drivers.
Although it is possible to calculate these figures manually based on fuel receipts and odometer readings, integrated fleet management software will automatically do these calculations using data from fuel card purchases and onboard telematics data.
Armed with this data, it is possible to identify which vehicles and drivers are returning the best and worst economy and explore the reasons. Is there a fault or maintenance issue with a vehicle that is affecting its fuel usage? Are there any anomalies between fuel card spend and business miles driven that might indicate fuel theft?
SMR metrics
SMR is another very significant fleet cost. These key metrics will allow you to ensure your SMR operation is running as efficiently as possible.
Preventive Maintenance
Routine preventative maintenance helps keep your vehicles on the road and maximises their lifespan. You need to know if any vehicles are overdue for their regular service or have uncompleted maintenance tasks as these can contribute to unreliability and additional costs.
Vehicle downtime
Monitor how quickly vehicles are in and out of the workshop is important. Hold-ups due to part availability, technicians not working as efficiently as you would expect, and unaccounted-for hours on the bill can all mount up.
Common faults
Identify what the most common faults and inspection failures are across your fleet. Similar problems across many vehicles might mean adjusting your maintenance strategies or investigating further with a manufacturer or supplier.
Tyre life
Tyre prices are escalating and likely to account for nearly half of SMR costs in the near future so tyre wear needs to be monitored and could be linked to individual driving style.
Vehicle metrics
Each vehicle in your fleet represents a large investment so it’s important to have a clear idea of the return each vehicle is making on that investment.
Total cost of ownership (TCO)
TCO gives you the true cost of each vehicle and is probably the most important metric. It takes into account the cost of buying or leasing, maintenance, depreciation, fuel and administrative costs such as insurance. TCO should help you determine optimal replacement times and whether your current purchase or leasing options need reviewing.
Vehicle utilisation
Target utilisation rates will vary according to the demands of the business but tracking average hours and/or miles per day for a vehicle will give you a good indication of whether your fleet is earning its keep.
Driver metrics
The behaviour of your drivers plays a key part in the overall performance of your fleet, helping determine not just fuel economy but also maintenance costs and vehicle downtime.
Driving style
Proactively monitoring driver behaviour allows you to identify driving styles that could be detrimental to fuel economy and the optimal operation of the vehicle. Speeding, harsh braking and acceleration or excessive idling can be identified and addressed to improve safety and reduce maintenance and fuel costs.
Driver penalties
Fines for speeding, parking or other infringements come directly to the vehicle owner. It’s important to track which drivers are responsible for these penalties. Driver education and even disciplinary action are needed to reduce the costs associated with penalties.
Incidents
Safety is critical to any fleet operation but the related costs of vehicle downtime for repairs can be very high and highly disruptive to the business.
Leveraging the data
To control costs effectively, the accuracy of your data is hugely important. Spreadsheets and paper systems are time-consuming and prone to error. Using fleet management software that automatically tracks these key metrics for you and can also integrate data from third-party systems such as telematics and fuel cards.
With the advanced reporting options available with fleet management software, the data can be broken down and analysed to give a real-time overview of fleet costs, and greater insight into the possibilities for controlling them.
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