The Value of KPIs
The average actual cost of operating a commercial truck is USD $180,000 per year. If you’re going to improve this figure, key performance indicators (KPIs) are essential for helping fleet managers assess their performance across different operational facets. Without KPIs, you can’t establish precise, measurable objectives, facilitate clear goal-setting and systematic progress tracking. KPIs help you prioritize efforts, ensuring that resources, time, and energy are directed efficiently toward critical goals while identifying areas needing attention.
KPIs are quantifiable, measurable metrics or data points that smart fleet managers use to assess and evaluate their performance. By quantifying goals and performance targets, it becomes easier to track progress and determine whether these objectives are being met. They are the basis for informed decision-making based on factual data, reducing the influence of personal biases. They serve to align the actions of individuals and teams with the overarching strategic vision of the organization, promoting coherence and synergy among stakeholders. KPIs function as early warning systems, allowing fleets to detect deviations from desired performance standards and respond promptly to rectify issues.
KPIs are Critical for Continuous Improvement
Through regular reviews, KPIs encourage a culture of continuous improvement, pinpointing areas where processes, products, or services can be optimized. Keep in mind that continuous improvement is a perpetual journey that organizations embark on to enhance their processes and outcomes. KPIs serve as a mechanism for the continuous monitoring and assessment of performance, ensuring that improvements are not just one-time achievements but are sustained over time. Moreover, KPIs also serve as a tool to identify new opportunities for enhancement, allowing organizations to stay agile and responsive to changing circumstances.
Another significant aspect of KPIs is their role in facilitating feedback and fostering a culture of learning and adaptation within organizations. KPIs create a feedback loop that enables teams to gain valuable insights from both their successes and failures. This data-driven approach encourages an environment where learning from experiences becomes the norm, ultimately leading to continuous improvement.
They also foster enhanced communication and transparency by offering a common language and standardized metrics for performance discussions across all levels of the organization. KPIs can be instrumental in benchmarking against industry standards, enabling organizations to gauge their position relative to competitors.
They provide a sense of accountability within organizations. When performance is measured and tracked, individuals and teams are more inclined to take ownership of their contributions to achieving their fleet’s goals.
The KPIs You Need to Track
Think of KPIs this way: they provide a structured, data-driven approach to measuring, monitoring, and enhancing your fleet’s performance, acting as your guide to success. Here are the KPIs you especially need to analyze:
- Total Cost of Operation: Tracking the total cost of operation provides a holistic view of the financial health of the fleet. This KPI helps fleet managers monitor all expenses associated with their vehicles, including fuel, maintenance, labor, and more. It is essential for cost control and budgeting, allowing fleets to identify areas where cost reduction efforts are needed.
- Average Fuel Consumption: Fuel costs account for 39% of a commercial truck’s operating expenses. Consider that a commercial truck easily guzzles U.S. $70,000 in diesel fuel. You see why monitoring fuel efficiency is so important. This KPI can help you identify which vehicles are less fuel-efficient so that you can take corrective actions, such as driver training or vehicle maintenance, to reduce fuel expenses.
- Maintenance Costs per Vehicle: This KPI allows fleet managers to assess the maintenance expenses for each vehicle in their fleet. High maintenance costs may indicate issues with vehicle reliability or driver behavior. By tracking this metric, fleets can identify problematic vehicles and implement preventive measures to reduce maintenance costs.
- PM Compliance: Preventive Maintenance (PM) compliance KPIs, including early, on-time, late, and critical maintenance tasks, ensure that vehicles are properly maintained and meet safety and regulatory standards. Maintaining high PM compliance rates minimizes breakdowns, improves vehicle reliability, and enhances safety. This is critical, as the cost of preventive maintenance is far less than the cost of breakdowns and the consequences that follow.
- Number of PM or PdM Tasks Completed vs. Scheduled: This metric is crucial for preventing unexpected breakdowns and ensuring that fleet vehicles remain in good working condition. When vehicles are regularly maintained as planned, it reduces the likelihood of sudden failures or malfunctions during operations, contributing to improved safety and reliability. By analyzing this KPI, fleet managers can identify areas where maintenance schedules may need adjustment, helping to optimize the maintenance process and resource allocation for better overall fleet performance.
- Ratio of Preventive vs. Reactive Maintenance Hours: This metric evaluates the balance between preventive maintenance and reactive maintenance. A greater emphasis on preventive maintenance hours implies that a fleet prioritizes proactive maintenance practices. Preventive maintenance encompasses planned inspections, servicing, and repairs intended to identify and resolve potential issues before they escalate into breakdowns. When a fleet stresses the importance of preventive maintenance, it signifies a proactive stance toward vehicle care, with the primary goal of preventing issues rather than reacting to them. Reducing the allocation of resources to reactive maintenance, which addresses issues post-occurrence, while concurrently increasing the emphasis on preventive maintenance tasks results in enhanced vehicle reliability. By addressing potential issues before they become major problems, vehicles are more likely to operate smoothly, experience fewer unexpected breakdowns, and have longer lifespans. An increased PM-to-reactive maintenance ratio leads to reduced downtime. Vehicles spend less time off the road for unplanned repairs, ensuring their availability for their designated purposes. You will find this shift results in lower maintenance costs.
- Number of Assets Out-of-Service: This KPI indicates how many vehicles are currently unavailable for use due to maintenance, repairs, or other issues. Minimizing the number of assets out-of-service is crucial for maintaining fleet efficiency and meeting customer demands.
- Downtime %: Downtime percentage measures the amount of time vehicles are not operational due to maintenance or repairs. Reducing downtime is essential for maximizing vehicle utilization and meeting delivery or service commitments. Lower downtime percentages indicate higher fleet efficiency.
These KPIs collectively provide fleet managers with valuable insights into various aspects of fleet performance, including cost control, safety, maintenance efficiency, and asset availability. By tracking and analyzing these metrics, fleets can make informed decisions, optimize their operations, and work towards continuous improvement in both cost-effectiveness and service quality.
Accurate KPI-Analysis Demands True Data
Data is the lifeblood of objective measurement, informed decision-making, performance evaluation, and the pursuit of continuous improvement. Without data, KPIs would lack the empirical foundation necessary to gauge success, identify weaknesses, and drive positive changes.
Data is just one advantage of cloud-based, enterprise-grade AMCS Fleet Maintenance software. It plays a pivotal role in data collection by capturing a wealth of information, encompassing maintenance activities, costs, asset status, and more, in real-time as maintenance tasks are performed. This data forms the foundation for KPI analysis. The software excels in preventive maintenance tracking, scheduling, and logging PM tasks based on various criteria, recording vital details about maintenance activities and vehicle involvement. This data is instrumental for scrutinizing KPIs as related to maintenance adherence and the reliability of fleet assets.
AMCS Fleet Maintenance excels in cost analysis by compiling data. This comprehensive dataset is indispensable for the analysis of KPIs concerning cost control and cost-effectiveness. Asset performance data is visualized through dashboards, offering real-time snapshots of asset performance, work-order progress, and parts inventory. These visuals facilitate the analysis of KPIs associated with asset utilization, downtime, and overall asset health.
The Importance of Advanced Analytics
AMCS Fleet Maintenance offers advanced analytics and trend analysis tools, enabling organizations to gain insights into KPIs over time. You can examine historical data trends and patterns. This empowers fleet managers to identify areas in need of attention or improvement. Moreover, the software excels in managing compliance-related data. This includes regulatory requirements, inspections, and certifications, which are essential for monitoring and reporting KPIs to ensure your fleet meets safety and regulatory standards.
Its robust integration capabilities further enrich the dataset by aggregating data from various sources, both within the software ecosystem and from third-party systems. This integrated data provides a comprehensive dataset for analyzing KPIs across various aspects of fleet management and maintenance. The software also tracks warranty-related data, helping in the analysis of KPIs related to warranty use and cost savings.
Real-time accessibility, facilitated by its true Software-as-a-Service (SaaS) implementation, ensures that data is always up-to-date and accessible.
Fleet managers can monitor KPIs on the go, making timely decisions based on the most current information. With the ability to configure the software, you can even define custom KPIs tailored to your specific needs and objectives, ensuring that KPI analysis aligns with your unique goals and metrics.
AMCS Fleet Maintenance software serves as a data-rich platform that not only collects data but also provides the necessary tools for comprehensive KPI analysis. For ideas on how to reduce fleet costs and improve productivity, we urge you to read our free eBook, Proactive Fleet Management: The Power of Preventive Maintenance.
You can also download our brochure, request a demo or get in contact.
¹The Real Cost of Trucking – per mile cost of a commercial truck, Truckers Report