Fleet planning – A common mistake that can cost thousands
Fleet planning, like a lot of business planning, can be a hit OR miss affair. It’s not always an exact science. But there is a big mistake that many fleet planners make that they may not even aware of — a mistake that costs fleets millions of dollars.
Strangely enough, this common mistake is not actually related to the planning itself. The planning side of the process might be perfect. The biggest mistake happens after the plans have been made.
Don’t make the same fleet planning mistake
If you’re involved with fleet planning, whether as a fleet manager, VP of Transportation, fleet services manager or COO, then it would pay to take a few minutes to find out what this mistake is — the savings to your bottom line are significant.
Fleet planners often forget that there’s more to planning than just coming up with a plan. They forget to “close the loop” and factor in both current and historical performance. This feedback loop is vital to creating measurable plans, and providing the ability to optimize business activities.
By not measuring how well plans are implemented and executed, fleets often continue to make the same mistakes, missing opportunities and then wondering why they struggle to move forward and improve their profitability.
How much is this mistake costing fleets?
This mistake is costing fleets millions of dollars as they miss valuable opportunities to improve their operations and save on a variety of fleet activities.
Using a Planned vs. Actual report, fleet planners can monitor the success of their plans in real-time, noting areas where the plans were unrealistic or unprofitable. This report can also identify other issues that add unnecessary costs such as:
- Out-of-route miles – By comparing the actual route taken by the driver with the optimized route calculated by your Telogis Fleet management software, variations are highlighted to show workers who ‘take the long way’ to get to the next job.
- Excessive time on the job — Using the Planned vs. Actual report to identify jobs that take longer than what was allowed for in the plan, fleet planners can easily see where either the plan needs to change (and the customer should be charged more) or where workers may require additional training or support to reduce time on the job.
- Unprofitable jobs — It’s prudent for any fleet to make sure they are spending their time profitably. Actual performance may highlight that some jobs are not a profitable use of your fleet resources.
- Under-utilization of assets — Workers, vehicles or equipment represent a significant opportunity cost. If they are not being fully utilized, they can represent a major expense. Performance reports across the entire fleet will show which assets aren’t being used as profitably as they could.
These “hidden” expenses cost fleets millions of dollars every year, all because the fleet planning process isn’t closing the feedback loop. Without this continual review, fleet planning activities are shooting in the dark, and planners have no way of knowing if they’re hitting the target or even what the target is.
How optimized is your fleet planning?
What areas of your fleet need optimizing? How can you find out what part of your planning isn’t working as well as it could be? The best place to start is to set up the right metrics so you can measure the effectiveness of your planning. It’s only by measuring your fleet with an advanced telematics solution such as Telogis Fleet that you’ll be able to uncover issues with your plan that need corrected.
And the sooner you start, the sooner you can improve your fleet’s bottom line.