KPIs are used in Business Intelligence to assess the present state of the business and to prescribe a course of action. The act of monitoring KPIs in real-time is known as business activity monitoring. KPIs are frequently used to “value” difficult to measure activities such as the benefits of leadership development, engagement, service, and satisfaction. KPIs are typically tied to an organisation’s strategy.
The KPIs differ depending on the nature of the organisation and the organisation’s strategy. Ultimately, they help an organisation to measure progress towards their organisational goals, especially toward difficult to quantify knowledge-based processes. And because you can’t improve what you don’t measure. they enable executives and central fleet managers to visualise trends, identify potential problems and make fact-based decisions to run the fleet more efficiently.
Choosing the right KPIs for your organisation is reliant upon having a good understanding of organisational objectives. This will impact the Total cost of Ownership (TCO) by identifying the comprehensive costs in the fleet, including taxes, fuel costs, insurance, fines and repairs. Identifying the TCO is a dense exercise that every fleet manager should complete. We encourage our clients to evaluate their assets based on the total lifetime cost of ownership. This perspective on cost management considers expenses including the variable factors of labour, maintenance, and fuel, in addition to fixed costs of purchase price and financing. Actions such as driver awareness, improved driving styles, right selection of vehicles can immediately decrease TCO. Once the TCO has been calculated, a cost per kilometre between vehicles, regions, entities, can be compared and monitored. Setting KPI goals designed to impact the controllable and significant portions of asset ownership yields the rapid achievement of Return on investment (ROI) and fleet optimisation.
Many of our clients find that the following KPIs have also been beneficial in the lowering of costs and the right sizing of their fleets.
The first step in this process is to ensure that we have developed a firm basis of “current state” data on their fleet. Understanding the present situation will allow our clients, guided by our expertise, to develop realistic goals and plans for best practice improvements and cost reductions as we gather and analyse data on that same fleet in the future. Consistency in the use of data to benchmark against KPI’s is key when analysing and presenting “current state” vs. “future state” data, for example, year on year cost variants may be a result of modifications to the fleet or the souring of better quality components that has reduced costs in one area. The use of our Business Intelligence module compared with standard dashboards allows real-time analysis of the data behind KPI’s enabling better cost control and potential areas for savings.
Cost per hour
This is a measurement that shows the cost that incorporates both how much it costs to operate a specific asset and how frequently that asset is utilised. Cost per hour evaluations help to identify assets that are inordinately expensive compared to similar assets in the fleet. This KPI puts all assets on an even playing field, thus hallowing you to replace or redeploy equipment that exceeds the benchmarked targets.
Utilization is a key measure of fleet management that shows the actual amount of time that an asset is actively being used verses the available time that a unit could be used. For example, in a 2080 hour work year, a lift truck that is utilised 500 hours per year has a 24% utilisation rate. This KPI determines assets that are being over or under used and to manage their entire fleet in a way that yields optimal utilisation with the least amount of units and lowest total costs of ownership.
Cost per unit
Not all material handling or industrial assets can provide exact utilisation or hour meter readings. This measure analyses the total spend in a category (IE: manual pallet jacks) and equalises that total to determine what each individual unit costs to own and maintain.
Mean time between failure
This KPI looks at the average hours and days between non-scheduled repairs. Ideally, this measure should have a high number of days between failures. Downtime and unexpected repairs can cause major issues, thus eliminating expensive, problem assets can immediately help to control costs and stabilise operations.
Preventative maintenance (PM) compliance
Preventative Maintenance Compliance is a metric that measures one aspect of service performance: the ability to complete scheduled preventative maintenance events in a timely fashion. Equipment that does not receive proper PM checkups consistently have more unscheduled repairs, higher lifetime cost of ownership, and reduced resell value. Additionally, regular PM servicing is a condition of most manufacturer’s standards and extended warranties. By helping our clients to hold service vendors accountable for performing on-time PM servicing, we reduce costs, downtime, and many administrative headaches.
Winflotte is designed to focus on helping our clients monitor key performance indicators (KPIs) that are meaningful, measurable, and actionable for their unique fleet operations. By pairing the historical cost and production information on your assets we are able to identify tactical and strategic options for your fleet that will assist in time savings, optimisation of your fleet assets, and reduced material handling fleet costs. Our BI (Business Intelligence) module, based on in-memory technology allows to visualise KPIs in a user-friendly way and more importantly drill-down into the data behind to really understand them.
See how Winflotte enables clients to analyse fleet management performance through the use of our BI Business Intelligence) Module. Please contact us for a demo for more information.