Evaluating KPIs: The most effective way to measure fleet performance
December 02, 2020
If the CFO of your company stopped you in the elevator today and asked you how your fleet is performing, what would you say? What metrics would you use to support your answer? Most fleet managers are under pressure from leadership to show continuous improvement when it comes to cost effectiveness. At the same time, macroeconomic factors push fleet costs up each year. Fleet managers need creative and innovative ways to avoid future costs by leveraging technology. If your total fleet spend tends to increase year over year, how do you show progress?
It’s not about quantity, but criticality to the business
Performance metrics should be linked to your company’s strategic objectives and critical to its core mission. To develop meaningful Key Performance Indicators (KPIs), be sure to engage stakeholders, consider internal and external factors, identify key and supporting measures and gather supporting data for each measure. Form metrics around vehicle connected data. Align your metrics with your company’s strategic goals, such as cost management, productivity, risk or sustainability. Set targets for each of your KPIs and supporting measures by utilizing internal historical data and/or benchmarking of similar fleets.
Your fleet Key Performance Indicators
KPIs will vary by organization, depending on your key strategic goals. For example:
Productivity Goal – Improve vehicle utilization by 10%
Your KPI = Total mileage capacity – actual miles driven
|
Average distance/vehicle/month |
Revenue per miles driven |
|
Vehicle per customer ratio |
Vehicle per employee ratio |
Safety goal – Reduce accident rate by 8%
Your KPI = Events per million miles/kilometers
|
Number of harsh braking events per driver per month |
Number of harsh braking acceleration events per driver per month |
|
Average cost / completed repair |
% of at fault accidents per driver per month |
|
% repeat offenders in the last 3 years |
Number of events involving cell phone usage |
Sustainability Goal – Reduce total fleet emissions by 10%
Your KPI = Emissions / Unit / Month
|
Miles driven per month |
% of vehicle exceptions |
|
% of hybrids in fleet |
% of 4-cylinder vs. 6-cylinder |
Take advantage of the data you have
In recent years, a huge wealth of data has become available and will only increase as technology progresses. Fleet managers need to look beyond historical indicators, like fuel economy or accidents per million miles/kilometers, and incorporate support measures that use telematics data such as idling, harsh braking or acceleration, speeding, average time at each customer site, revenue per visit, etc. Combining telematics data with your company’s strategic customer goals can lead to clearly defined KPIs that drive business performance. Today’s investments in technology will further push the evolution of fleet and KPIs.
Evaluate KPIs and evolve with technology and innovation
Take a few steps back. Focus on your company’s core mission and strategic objectives and determine how fleet contributes to these end goals. Identify your KPIs and supporting measures accordingly. Remember, KPI development is not a ‘one and done’. These measures should evolve with your company objectives and the connectivity that is making data available that simply was not possible in the past.
Engage your fleet management company to assist. To learn more about how Element can help optimize your fleet, contact us today.
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