Fleet managers can choose from a variety of metrics and key performance indicators (KPIs) when focusing on operational improvement, including everything from how many miles the fleet covers to how much cargo it delivers.
But when looking at overall performance, two of the most important are fleet productivity and fleet efficiency.
People often use these words interchangeably, but productivity and efficiency are different. Productivity tells you how much, while efficiency tells you how well. So, if you get a lot done, you’re productive. But if you get a lot done using the smallest number and amount of resources possible, then you’re also efficient.
And that’s an important distinction when looking at your fleet.
What is fleet productivity?
On the most basic level, it’s how much work you’re accomplishing with your fleet. There are different ways to calculate it, but a simple one to start with is how many miles your drivers are covering.
How can you boost fleet productivity?
You can start with a quick list of all the things that slow drivers down, from traffic to paperwork, and then look for specific solutions for each.
Traffic is inevitable but getting stuck in it isn’t. With better access to real-time traffic reports through GPS technology, you and your drivers can plan better routes and adjust as the situation develops.
Implement digital DVIRs
Another way to boost productivity is to have drivers behind the wheel and on the move for as much of the day as legally possible by streamlining their paperwork. Instead of asking them to complete paper-based inspections that take a lot of time and introduce a lot of bad data into your records, you can streamline the entire process for pre- and post-trip inspections with digital driver vehicle inspection reports (DVIRs).
What is fleet efficiency?
While productivity is a raw number, efficiency is a more refined one. Here, you’re looking not only at how much work the fleet is doing, but also how much it’s costing you to get that work done. You can think of it as the return on investment you’re able to see. It’s the how much time, money, and energy you’re putting into the fleet subtracted from how much value you’re pulling out of it.
How can you measure fleet efficiency?
Just like with productivity, there’s more than one way.
Vehicle revenue
Usually set up as a measure of revenue per month, here you can get a sense of how much each vehicle is contributing to your bottom line. You take all the revenue the fleet generated in one month, divide it by the number of vehicles for a rough estimate of each vehicle’s revenue. The advantage is that you’re also including all the times vehicles are idle, suffering downtime, or racking up empty miles.
Mile cost
You can also look at how much it costs you for each mile the fleet collectively covers. There are two advantages here. One, you can figure out your current efficiency, which is the first step to finding ways to improve it. Without a baseline, you don’t know if things are getting better or worse over time. But knowing the cost per mile also helps you determine how much you should be bidding on future contracts. Once you know how much it costs you per mile, you have a solid sense of how much to charge per load.
Capacity usage
Instead of tracking the number of vehicles, with this measurement you’re focused on the fleet’s capacity. It’s not how many vehicles; it’s how much they can carry. Best practices and ideal numbers vary across types of industries, so managers of a fleet of taxis have different targets than those at a trucking company.
How can you boost fleet efficiency?
Because you can think of efficiency as a measure of the return you see on your investments of time, money, and energy, boosting efficiency comes down to finding ways to get maximum benefit from minimum inputs.
Make communication stronger, faster
Anytime you streamline a process, you gain efficiency. And in most of your processes, poor and slow communication is causing a lot of friction. So, anything that makes it easier to share information helps you boost efficiency.
For example, every time you and the drivers start up a game of phone tag, everyone is wasting time and energy. That collection of missed calls and confusing voice mails has your drivers sitting by the side of the road unsure what to do next.
But once you have fast and reliable ways to stay in contact in real time, you can make decisions faster, based on better information.
Get ahead of reactive maintenance
Modern vehicles are complex machines packed with microcomputers, so when something goes wrong, it can take a lot of time to even diagnosis the problem.
By moving away from reactive to preventive maintenance, you give yourself a much better chance of finding and fixing small issues before they develop into the sorts of problems that have your drivers sitting by the side of the road waiting for a tow.
But for a lot of fleets, the why is obvious. It’s the how that’s hard. Setting up a preventive maintenance program starts with deciding on your set inspections and tasks, as well as deciding on cadences that make sense. It’s possible to stray into over maintenance, which comes with its own set of issues, the most important being that it immediately eats into your efficiency. Remember, you’re trying to get the most benefit from the least amount of work possible.
Move away from manual data entry
Generally, fleet management includes more recordkeeping than most other industries because of all the regulations, so you can save a lot of wasted time and money if you have fast, reliable ways to capture data for both drivers and you.
Doing everything manually is both slow and unreliable. All it takes is accidentally punching in the wrong number in the wrong spot to spoil your data. Manual methods also tend to be after the fact, increasing the chances of mistakes. Often, drivers are trying to remember and log information long after it’s had a chance to grow fuzzy in their head. You can improve accuracy by introducing digital systems that automate or greatly simplify a lot of the data capture process.
How does the right EAM help you?
Modern enterprise asset management (EAM) solutions for fleet help you implement all these ways for boosting both productivity and efficiency.
At the heart of the solution is a central database that keeps all your data safe, secure, and accessible by everyone on the team, from the drivers to the maintenance techs, from you to every other department in the organization. Instead of having your operations spread out thin and disconnected across piles of paper or spreadsheets, you have everything right where you and everyone else needs it.
Surrounding and feeding that database are a combination of features that smooth out your workflows while increasing the accuracy of your data. With digital DVIRs, drivers can quickly complete pre- and post-trip inspections and reports, getting the data into the system in real time. And when they need to reach out with an important update, the mobile app gives them a fast, reliable channel directly to your office.
Once you have good data, you can leverage it into actionable business intelligence, including PM programs that help you get the most miles with the least unscheduled downtime.
What’s next?
Set up a call with one of our experts to discuss how ManagerPlus can help you boost your fleet’s productivity and efficiency.
Summary
Although there are a lot of different metrics and KPIs for fleets, two of the most important are productivity and efficiency. In everyday use, the two are interchangeable, but for fleet managers, there are critical differences. Productivity is how much your fleet is producing, while efficiency is more closely related to return on investment; it’s how much the fleet produces minus the time, money, and effort you’re putting into it. Boosting productivity often comes down to finding ways to keep drivers on the road, out of traffic and away from time-consuming paperwork. For efficiency, you need to focus on getting the most value from your various inputs. Here, your focus can be on streamlining communication and data entry. You can then leverage that better data into an efficient preventive maintenance program that saves resources by helping you find and fix small issues before they develop into breakdowns that force your drivers off their routes. Implementing the right EAM solution for fleet helps you reach all these goals. Once you have a central database of reliable data, you can keep everyone in the loop, streamline data capture, saving time and ensuring cleaner data, and the leverage it for better decision-making.
