Three Commonly Overlooked Money-Saving Applications of Fleet Analytics

By Kathy Massey, VP of Client Services, AmeriFleet

With the advent of technology that can capture and analyze a huge quantity and wide variety of data, fleet management has increasingly become an analytics-intensive endeavor. This has enabled fleet owners and operators to achieve unprecedented efficiencies across a number of key performance categories. Typically, these have included optimizing residual value, fuel and maintenance expense, logistics, driver and fleet safety, all of which has positive effects on the bottom line.

But in AmeriFleet’s experience with fleets of all types — from light-duty to vocational and heavy-duty vehicles – we’ve found three areas of opportunity that are consistently under-recognized in terms of data capture, actionable information, benchmarking and decision tools: logistics spend, inventory management, and compliance.

Key metrics, such as average miles/move, days in storage, unassigned inventory versus out of stock purchase and rental expense, return-to-service ratios, non-compliance expense, and in general, overall supply chain optimization all lend themselves to significant improvement when the same approach to “Big Data” is taken as other dimensions of fleet operations. Several examples will illustrate the potential benefits.

Logistics spend
Without clear information about all available vehicles to help fleets identify the vehicles closest to the delivery destination, they might inadvertently move vehicles longer distances than they should. On the other hand, while some fleets might avoid the unnecessary expense by moving the most proximate vehicle, they might do so without considering the cost for title and registration transfer if that vehicle were registered in another jurisdiction.

The alternative is an analytic, decision-making tool based on current, accurate information about compliance requirements (like inspections) and associated compliance fees. Working with a fleet’s specific costs, fleet management and AmeriFleet can use this kind of tool to accurately weigh all these factors in addition to transportation costs. The result is new-found cost savings from a new way of confidently selecting the optimum vehicle for relocation.

When considering the vehicle supply chain, there are numerous opportunities for converting data into actionable information which yield optimized results. This holds true for streamlining the repurposed/in-service vehicle supply chain as well as the new vehicle/in-to-service chain.

For repurposed vehicles, key data points include the average time it takes for four steps in the process between:

• vehicle pickup and the receipt of vehicle condition information;
• vehicle pickup and the start of repair or reconditioning;
• start and completion of repair or reconditioning, and
• completion of repairs and delivery.

Weighing these metrics against rental expense and driver productivity gives fleet management the opportunity to make more-informed repair or replace decisions.
For new vehicles, and particularly for upfit vehicles, the opportunities can be even richer. The first step involves measuring and benchmarking all key phases of the vehicle upfit process, from OEM order to transport time to the upfitter, upfit completion and time into service. The next step is to weigh these metrics against daily average revenue generation for each vehicle. The comparison enables management to assess the return on investment for expedited transport, upfit design changes and turnkey, ready delivery services.

Inventory management
The goal of every fleet is to minimize unassigned vehicles. The challenge, however, is to find the optimum amount of unassigned inventory to carry. Again, the solution is an analytic system that takes into account a number of key data points. These include – both by vehicle and in the aggregate – such variables as total days in storage, number of rentals, total rental expense, and annual out-of-stock purchase volume and expense. Again, the solution has already been built: a viable “decision tool” that identifies the optimum level of unassigned inventory required to minimize rental and out of stock purchases.

Vehicle recalls are another dimension of fleet management that presents challenges and opportunities. The challenges are to make sure that the driver is aware of open recalls and that he or she addresses the recall in a timely manner. By accessing multiple recall data-reporting systems and developing comprehensive communication and follow-up systems, fleets can achieve higher levels of rectification compliance which, in turn, enhances the driver experience. In addition, since vehicles with open recalls can delay the remarketing process, a recall management data system expedites time to sell and optimizes residual value. Analytics measuring time to sell, delay cost and the value of enhanced driver experience can be used to justify investment in a recall management system.

Compliance
Safety and brand protection are top of mind for all fleets. The majority of fleets utilize a comprehensive set of metrics on driver behaviors, training and collisions as they work to continually improve transportation safety. Fleets have developed, documented and implemented driver safety programs that do an excellent job of protecting their employees and fellow travelers.

What is sometimes overlooked, however, is the financial and brand risk when a service provider is behind the wheel of a fleet vehicle. This is where key performance metrics and safety benchmarking can help fleet management insure that the appropriate commitment to safety is exhibited by both employees and transport service providers.

The most commonly used benchmarking metrics for commercial fleets is the annual benchmark study issued by the Network of Employers for Traffic Safety (NETS). This comprehensive study brings together some of the world’s largest and most socially responsible companies to analyze crash metrics, compare findings and share best practices. The benchmarking reports on such key metrics as crashes per million miles, injury and fatality frequencies, crash type and cause while considering a fleet’s road safety policies, driver training programs and crash review practices. Fleets can use this comprehensive annual report to compare their own metrics against peer group fleets and identify areas for improvement. Safety minded fleets can also compare service provider crash metrics to the benchmark study as well as in comparison to the fleet’s metrics and thereby assess the service providers’ commitment to safety.

It isn’t news that fleet now lives in the era of “Big Data.” What is news is that many fleet managers have yet to explore all the dimensions of fleet management where the application of contemporary analytic data technology can yield undiscovered, meaningful savings of time and money. Logistics, inventory management and compliance are three such areas. Be sure you work with service providers who can help you fill these gaps.

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