Key performance indicators (KPIs) are an important measurement for making improvements in your fleet. Each fleet needs to set its own KPIs, but every fleet needs performance standards to use as objective measures of how well it is doing.
The purpose of KPIs is to improve operations to make the fleet more efficient. A by-product is cost reduction.
KPIs can be set for every department of a fleet; for example, KPIs for vehicles and drivers can include total cost per mile, fuel cost per mile, miles per gallon, and idle time percentage. With telematics data, fleet managers now have a whole dimension of essential KPIs around driver performance. Telematics devices can identify unacceptable driver behavior and allow you to coach drivers to improve that behavior before it results in a violation.
You can also set KPIs around cost per delivery and on-time delivery rates.
For maintenance departments, this can include parts and tire costs per mile, repairs between preventive maintenance services, and uptime and road calls per million miles.
Safety-related KPIs can also be set, such as DOT or OSHA accident frequency.
However, determining what you will measure is just the first step. You then have to decide on the acceptable performance standard for each KPI. Think of it this way: KPIs are goals, and appropriate metrics are needed to monitor and measure your progress toward those goals.
Although each fleet will have a different standard of performance, the goal remains the same: to make improvements from where you are to where you would like to be to become more efficient and more profitable.
Setting KPIs and determining the acceptable standard of performance must be coupled with regular data reviews to assess whether you are meeting your targets and to take action if you are falling short.
How often you review KPI data is up to you. Some fleets measure KPIs weekly, but thanks to today’s technology platforms, it is possible to do so in real time and make operational adjustments quickly.
Setting KPIs and then measuring your performance against the standards you set for each KPI should lead to improvements in your operation.
