Without benchmarking, there is no effective way for a fleet manager to contain costs or to understand problem areas that need urgent action.
In an economically constrained business environment where fuel costs are at record highs and our currency is under strain, it is vital for fleet managers to make use of bench-marking as part of their routine.
Simply put, benchmarking is establishing a set of data that can be compared to industry standards to provide an instant picture of how your fleet is doing.
A vehicle that is not properly maintained, is underutilised or is used inefficiently can cost your business a lot of money. If your firm relies on a large number of vehicles to get tasks done, effective management of your fleet can be a make-or-break issue. Fleet benchmarks can be used to track, manage and improve fleet operations.
A benchmark is a standard or point of reference used to gauge quality or performance. You can choose a fleet benchmark for any area of vehicle operations. Fleet benchmarks can be based on your business’s experience. For example, you could set a standard reflecting past vehicle maintenance costs. Another way to set benchmarks is to base them on fleet performance figures reported for your industry in trade publications or industry surveys.
Sudesh Pillay, Head of Consulting and Data Analytics at EQSTRA Fleet Management, says: “The benchmark is a standard used to compare performance. Many different things can be bench-marked – each individual vehicle, across the entire fleet or even across the industry.
“It is a method to gain statistics you are interested in. For example, the vehicle manufacturer might state a fuel consumption figure so you would look at actual experience with that vehicle in your fleet and compare.
“It can also be used to compare within the fleet how drivers are performing against each other. For financial management purposes and strategy you have to compare to see you are competitive in your particular industry.”
For fleet benchmarks to be useful, you must measure something relevant to your business needs. For example, if you set a fuel consumption benchmark of 20,0 l/100 km, you must measure the actual fuel use.
The measurement is called a metric. Benchmarks must be specific and realistically achievable. Suppose you want a benchmark for fuel use and your current fleet average is 23,0 l/100 km. A benchmark of 20,0 l/100 km may be an achievable goal, but a standard of 11,0 l/100 km is not realistic.
“You can set fleet benchmarks for many metrics. However, you need to measure what matters. The metrics you select and the benchmarks you set must provide information that helps improve quality, profitability and cost controls.
“Tracking and setting standards for the time vehicles sit idle and the kilometres driven are examples of useful fleet benchmarks. Other measures you may find helpful are fuel consumption, accident rates, response time to customer requests and orders, depreciation and the life cycle cost of operating your vehicles.”
Some other useful benchmarks are:
- Cost per distance travelled (CPK)
- Maintenance: This can be overall per vehicle or drilled down to specific parts or components. For example, vehicles that travel regularly on dirt roads: how many windscreen breakages per vehicle.
- Fuel
- Tyres: Does one driver need to replace tyres more often than the others do?
- Accidents: How many incidents per 1 000 kilometres and is one driver more prone to this than others are.
- Speeding: Combined with on-board vehicle telematics this can identify errant drivers.
“It is also useful to benchmark the time specific vehicles spend on tar or gravel roads,” says Pillay. “This will help to analyse what vehicle is fit for the purpose intended. You can take all the precautions but incidents will always happen. However, if you are not bench-marking, there is no frame of reference to make improvements or to tailor your fleet. We can help to do that.”
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To give it some perspective as to how important it is globally, the first international fleet safety bench-marking workshop was held in Bangkok in March, 2007 and remains high on the topic list for fleet management conferences around the world.