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The Most Important KPIs in Fleet Management

Last updated : July 5, 2024
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Tracking the right key performance indicators, or KPIs, is crucial for effective fleet management. By monitoring the correct metrics, as a Fleet Manager, you can measure the impact of strategic decisions and take steps towards improving your productivity and results.

In this article, we will cover the most important KPIs every Fleet Manager should include in their measurement plan, so you can make the best tactical decisions for cutting your costs, improving your productivity, and increasing the sustainability of your fleet.

KPIs for operations and productivity in fleet management

There are a number of operations and productivity KPIs that can help Fleet Managers to track their performance. If data relating to these metrics is collected and properly analysed, it can help you to spot the areas where real improvements can be made.

Fleet management services and solutions like MICHELIN Connected Fleet can help you to measure the most important fleet management KPIs and put together an action plan that will help you achieve the productivity levels you’re aiming for. Here’s what you need to be monitoring.

1.Task completion levels

Monitoring the number of tasks that are completed by your team each day will allow you to keep a solid record of your fleet’s productivity levels. You can then use this data to identify any areas where improvements need to be made and define the actions you need to take to increase your company’s overall efficiency and tasks/hour ratio.

2.Cost analysis and deviations

Total cost analysis is also an important KPI that you need to be monitoring. This will ensure you’re able to identify any deviations in your budgets, and the sources of them.

As a result, it will allow you to make any necessary adjustments to the use of your human and material resources. This will have a significant impact on your results.

Service delivery

Measuring your service delivery is key to your fleet’s success, as it will allow you to see where you’re performing well, where you’re falling short, and where you need to make improvements to meet your clients’ expectations. Here are the KPIs you need to be paying close attention to in this area.

1.Scheduling adherence

Tracking your vehicles’ locations using GPS devices will allow you to find out how well your drivers are adhering to their schedules. You will be able to monitor whether drivers have started their shifts late or deviated from their intended schedules, for instance. This will make it easier for you to identify any serious issues and provide the proper training or support your drivers need to work more efficiently.

2.Delivery times

Analysing the delivery times of your vehicles, cargo, and routes will help you to make important decisions when it comes to improving your fleet’s efficiency. This will ultimately lead to better delivery times and increased client satisfaction.

3.Internal and external client satisfaction levels

Recording your clients’ satisfaction levels is vital. But, if you combine this information with records of the satisfaction levels among interacting departments, you’ll be able to implement additional measures to improve your efficiency.

Driver behaviour and performance

The way your drivers conduct themselves on the road will have an impact on their fuel consumption, their safety and that of their cargo, and the condition of your vehicles. So, monitoring driver behaviour and performance is crucial.

With MICHELIN Connected Fleet, you can introduce a Drivers Incentive Scheme, where drivers’ behaviours are separated into three scores: smoother (harsh events), safer (speed), and cleaner (idling).

Our platform also hosts two driving behaviour dashboards, which provide a clear overview of your drivers’ performance. One displays a fleet overview, which shows the average score in each of the three categories across your whole fleet. And, the other is for individual drivers. This displays top-performing drivers who score the highest in each category, as well as the three lowest scoring drivers who may need additional training.

Driver behaviour and performance can be broken down into these main KPIs.

1.Harsh acceleration and braking (smoother score category)

Harsh acceleration and braking are key indicators of poor driving practices. With fleet management services and solutions, you will be able to measure how many harsh events a driver commits on average. These practices can lead to excessive fuel consumption and vehicle degradation, incurring higher costs for your business. This means they should be addressed.

2.Speeding (safer score category)

Speeding puts your vehicles, cargo, and drivers in danger, so it’s important to ensure your drivers are adhering to the legal speed limit at all times.

With MICHELIN Connected Fleet, you will be able to access valuable data, such as the percentage of the total distance your drivers have travelled at safe speeds. You can then compare your vehicles’ speed with local speed limits to identify any speeding infractions. If necessary, you can then implement specialised training to increase your drivers’ and vehicles’ safety.

3.Excessive idling (cleaner score category)

Excessive idling leads to increased fuel consumption and therefore increased costs. With fleet management services and solutions, you’ll be able to monitor how long your vehicles have been left running while they weren’t on the move. You can then look for trends in your drivers’ performance. Once again, this data can be used to implement specialised training to improve your workers’ performance and decrease your costs.

Vehicle performance

Monitoring how much value each of your vehicles provides for your business can allow you to make strategic decisions that will reduce your costs and improve your productivity. For instance, you can use this information to determine when it’s time to transition to a green fleet.

Here are the metrics you should be keeping a close eye on to make the best decisions.

1.Vehicle TCO (total cost of ownership)

It’s vital you monitor the costs of your fleet, as it will inform you about your expenditure and profit margins.

A major cost associated with maintaining a fleet is the TCO of your vehicles. This includes all of the costs associated with vehicle ownership, such as the initial costs, maintenance, fuel consumption, and licensing fees. Monitoring the costs that come along with each vehicle in your fleet will allow you to identify areas where you’re losing money, so you can make the necessary changes to maximise your fleet’s cost efficiency.

2.Vehicle utilisation and replacement

The term vehicle utilisation refers to the added value each vehicle provides for your business — for instance, how many miles a day a HGV travels compared to its TCO. This takes into account how useful a vehicle is to your fleet and whether it is reaching its full potential and helping to generate enough profit.

Vehicles degrade over time and will eventually need to be replaced. Tracking how much is spent on replacing vehicles is an important KPI as it will help you set a realistic budget for maintaining an efficient and modern fleet.

3.Vehicle breakdowns

Breakdowns can occur due to accidents or malfunctions, and they should be avoided if at all possible as they will reduce your fleet’s efficiency. If maintenance issues are left unchecked, your vehicles will be more susceptible to breakdowns. For this reason, you need to monitor total vehicle breakdowns across your fleet, tracking trends should they appear, as they could indicate there are problems with your current maintenance programme.

4.Maintenance downtime

Vehicles requiring maintenance won’t be available for use and, the longer they’re out of action, the more they’ll reduce the efficiency of your fleet. This is why it’s vital that you monitor the downtime of your vehicles to ensure they aren’t out of action longer than necessary.

5.Fuel consumption

Fuel consumption is inescapable and represents one of the most important expenses of any fleet. But, although it’s true that it is an expense that cannot be completely avoided, it is possible to develop strategies to keep your fuel costs as low as possible.

Tracking the fuel consumption of your vehicles will allow you to determine which actions are necessary to improve your fleet’s efficiency. For example, modifying your routes and providing your drivers with specific training can help to reduce how much fuel each journey requires.

6.Empty miles

Empty miles are one of the most common causes of resource-wasting in the transport and logistics industry. Monitoring this KPI and measuring the distances covered by each of your vehicles will help you design better routes that reduce empty miles and improve your efficiency.

Collecting the right data and analysing it in line with the most appropriate KPIs can truly help you to improve the efficiency and productivity of your fleet. This will then allow you to grow your operations sustainably.
The MICHELIN Connected Fleet team

Written by The MICHELIN Connected Fleet team

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