Achieving success in the market is the main objective of every fleet manager, even if the meaning of this “success” is different for each one of them. But how to reach this place? How to analyze if you are on the right path?
The answer to these questions are the KPIs: Key Performance Indicators, or Key Performance Indicators. To achieve most of your goals, you'll need them.
In other words, KPIs are metrics to evaluate the processes and results obtained by management. They help you make the right decisions to achieve the long-awaited success.
With that in mind, throughout this text we have separated what KPIs are, their importance for the management of light fleets and some examples of indicators to use in your company and check your Return on Investment (ROI).
Understand what KPIs are
How important are KPIs in fleet management?
How to define KPIs in light fleet management?
Examples of KPIs for light fleet management
What is it and how to calculate the ROI of a fleet
Understand what KPIs are
From the measurement of its processes, performance metrics are obtained, which are the key performance indicators used to monitor and evaluate how the company is progressing.
KPIs in fleet management, then, are indicators that can really help the manager to achieve the best results with their vehicles, drivers and other collaborators.
With good management, based on KPIs, you can reduce costs and go much further, bringing more results and greater performance to your company. All of this through alignment with the interests of your business, together with a strategic analysis of the fleet with goals to be achieved and better results delivered.
Read more: Telemetry enables a 75% reduction in the number of infractions and claims
KPIs help your fleet not only to make adjustments, but also to understand your biggest problems and those of your employees and how to solve them.
How important are KPIs in fleet management?
The adoption of KPIs in your fleet management helps to observe the real results of actions and innovations applied in management, as well as new practices and other strategies.
It is through these indicators that you can analyze problems in your fleet that would not be seen and identified otherwise. This is all through data analysis.
Read more: Trends for fleet management in 2022
Thus, the main advantage and importance of using KPIs in fleet management is the cost reduction in the company. This happens because they make it possible to identify above-average consumption, which can be improved.
In addition, among other benefits presented by the indicators, we can list:
- Deliver results that can be calculated: KPIs are tools that deliver measurable results. That is why strategies and actions are taken based on their results. This allows the light fleet manager to take corrective measures to achieve company objectives and improve areas that need adjustment.
- Optimize performance: through KPIs, you can also analyze employees and sectors that present high and low performance. So management can channel resources to optimize and improve the performance of these employees.
- Offer performance incentives: The information provided by metrics also gives employees more incentives to work more effectively. Which contributes to the continuous improvement of your KPIs.
- Increase efficiency: By assessing its growth and success using KPIs, the company gives its employees measurable goals to achieve. By having a clear idea of how to achieve these goals, employees can direct actions to meet these goals.
- Improve decision-making: by implementing the use of KPIs in fleet management, decision-making becomes much easier for managers. This is because the indicators do not leave much room for doubts and uncertainties, providing a clear path to follow.
- Improve the budget: not only by reducing costs, but KPIs also better direct your company's budget towards investments that are really needed to improve your processes.
How to define KPIs in light fleet management?
Metrics for data analysis that will define your fleet KPIs are obtained from various sources.
However, nothing is more important than organization when checking a KPI. This is because data, metrics, information and other numbers can be lost throughout the process.
Therefore, data can be analyzed with the help of systems such as Golfleet Telemetry, which provides intelligent reports in addition to a dashboard that offers hundreds of indicators, with each of them being able to be analyzed with operations of total, average or minimum and maximum.
Read more: what is telemetry used for?
In addition to dashboards, the software also allows all indicators to be made available in specific reports.
Characteristics of a good KPI
To obtain an effective KPI, it must have some characteristics that must be analyzed:
- Relevant and high-impact: a KPI that will deliver results is one that is relevant to the business and has a solid impact;
- Understandable, simple and important: KPIs must also be understood by your employees and not just by management. In addition, it is also necessary to understand the importance of indicators and segment them in a simple way.
- Balanced: the indicators must also be balanced, but in the sense of presenting results in both the short and long term.
- Temporal: must be measured in a timely manner, whether weekly, monthly, etc.
Taking all of this into account when identifying your KPIs is essential to Know your company's strengths and weaknesses. Without them, your fleet management may not be able to devise improvement strategies, in addition to increasing the risks of inefficiency in ensuring business success.
Examples of KPIs for light fleet management
As you already know, KPIs can measure the performance of any area, including light fleet management. These indicators are extremely important, mainly because they show not only performance, but an indication that something is not going as it should.
We list some of the main indicators that managers should be aware of in managing small fleets, they are:
Average fleet age
With this indicator you can quickly analyze the condition of your vehicle fleet. In this way, this KPI contributes to making decisions regarding fleet renewal and sizing. He can also assist in comparison of vehicles of different brands, but who are the same age.
unavailability rate
This KPI is the calculation of the time in which a vehicle is unusable in maintenance. With it, you consider a lot of data such as: the operational capacity of the vehicles, the ideal size of the fleet to meet your demand and the cost of having a vehicle stopped for maintenance.
Average fuel consumption
Here it is possible to analyze the performance of the vehicle in relation to fuel consumption. It is the ratio of kilometers driven and the amount of fuel needed to travel that stretch.
Read more:How to have control and fuel economy in the management of light fleets?
Vehicle operating cost per kilometer driven
With Control of maintenance and operating costs of a vehicle, it is possible to determine the monthly costs, for example, of each vehicle in the fleets.
In this way, the manager can see which vehicles have the highest occurrences of breakdowns and stops, which equipment, such as lubricating oils, show more performance, which routes cause more wear on vehicles, etc.
What is it and how to calculate the ROI of a fleet
ROI is a well-known acronym for managers and comes from the English Return Over Investment, or Return Under Investment. ROI is also one of the main KPIs to be analyzed in light fleet management, since it is through it that how much was invested and the profits or losses over a given period are analyzed.
It is through ROI that the manager can also develop new action plans or maintain those that are already working.
Read more: TCO & ROI: two acronyms that make the difference in fleet management
To calculate the ROI you need to have some data collected:
- Total or partial number of vehicles in your fleet (depends on the strategy);
- Relative spend number of what you want to calculate.
With this, you can apply the standard formula to calculate ROI:
Thus, you are able to calculate the ROI on various strategies and other indicators, such as the amount of profit obtained through preventive maintenance, the efficiency of training for your drivers and many other actions applied in your company.
In addition, the calculation of ROI can also be facilitated through the data obtained by a system of telemetry like Golfleet.
Do you want to understand even more about how this system works and how it can improve your company's results? Then access our free eBook:
