How much could benchmarking save your fleet?
Benchmarking, or the process of using a standard to measure performance, is an integral part of effectively managing a business. Benchmarking is a popular method of determining business health, as it provides managers with a relatively easy way to gauge how well they’re performing relative to the standard. While it won’t always tell the full story, benchmarking can be an excellent way to get a quick overview of what’s happening and if there’s anything that requires attention.
There are many different types of benchmarking available to help businesses measure performance or make strategic decisions, gauge their financial well-being, or compare with how they did in the past.
Fleets stand to gain a lot by benchmarking their own performance, improving their efficiency, profitability and—something that will be warmly welcomed by us as consumers—their service standards.
Fleets — What are you measuring?
The old saying that you can’t manage what you can’t measure is very true. It’s also very true that what you’re not measuring you can’t improve. So, if you’re a fleet and you’re not measuring, there are likely areas of potential cost savings that you don’t know anything about. How can you start fine-tuning your fleet to improve your bottom line? The key lies in knowing what to measure.
- Unsafe driving — Speeding, hard braking or accelerating are all elements of unsafe and uneconomical driving
- Idle time
- Out-of-route miles — actual vs. planned
- Fuel card use
- Asset utilization
- Unauthorized use
Benchmarking reveals profit opportunities
Benchmarking studies have been performed on large fleets with impressive results. One study conducted on the Minnesota DOT (MnDOT) was able to draw some helpful conclusions to assist fleet managers to understand the benefits of benchmark analysis. While having a large fleet of over 11,000 assets, MnDOT had limited methods of measuring performance, unlike other states that had implemented comprehensive fleet analytics.
For example, Arizona, one of the best performing DOT states, measured approximately 130 fleet metrics. Compare that with Minnesota, which was only reporting on around half that number. That meant a lot of fleet analytics that were being left unreported and, subsequently, resulted in unchecked wastage.
The basic objective of the MnDOT benchmarking study was to highlight ways the department could cut costs. By using current performance as a benchmark, as well as the standards set by other fleet managers and DOTs, and then measuring performance over a specific period of time, the department would then be able to uncover hidden expenses and areas where current practices could be upgraded.
For example, the study found that best practices for fleets, based on their findings from the 35 states that participated, included such things as:
- Set clear, understandable and uniform measures and targets
- Schedule maintenance to minimize equipment downtime
- Centralize fleet ownership for purchasing and disposal of assets
- Have a fleet manager in charge of the organization’s fleet
Essentially, best practice is about being able to measure a fleet’s performance using standard, uniform methods so that it is easy to see areas where cost savings can be made and revenue opportunities taken.
GPS fleet tracking keeps your business accountable
Overall the study emphasized the need for fleets, government or otherwise, to have good information systems that can “easily produce graphical outputs to assist with decision making.” Comprehensive location-based intelligence, like that offered by Telogis Fleet, provides managers and VPs with the right benchmarking information, at the right time, to make the best decisions for their fleet and their business.