Fleet benchmarking: The important points to consider when setting benchmarks
February 15, 2023
What gets measured, gets managed - we’re here to provide deep expertise and insights to our clients, through fleet benchmarking data and strategic consulting, to improve performance and the path to achieve your critical goals. We’ll help you to understand where to focus your efforts and how to optimize resources based on fleet management benchmarks.
What is fleet benchmarking?
Fleet benchmarking is the comparison of programs, including policies, processes, and subsequent performance measurements versus your peers or an industry standard.
Importance of benchmarking
Benchmarks are important, as they allow you to identify best practices and improvement opportunities. Best practices can then be leveraged across your fleet as a continuous improvement goal. Improvement opportunities can be further defined, prioritized, and actioned to ensure success in meeting strategic goals.
Benchmarking to elevate fleet performance
Benchmarking provides clients with quantitative and qualitative performance insights to increase competitiveness and enhance operations. Element Fleet Management can provide value by interpreting benchmarking data and making recommendations to help you manage costs and to achieve solid performance. We also highlight the benefits and challenges of pursuing performance opportunities by outlining the financial, cultural, and technical implications of adopting better-in-class or best-in-class behaviors. In summary, we will present a cost/benefit analysis of potential scenarios for effective decision-making.
Key components of an effective fleet management strategy
Key components of an effective fleet management strategy include:
- Stakeholder partnerships internal to the organization such as operations, finance, procurement, sales, and human resources.
- Stakeholder partnerships external to the organization including Element, original equipment manufacturers (OEMs), and upfitters.
- Prioritized corporate goals within the organization.
- Subsequent SMART (specific, measurable, attainable, relevant, and timebound) goals with clear alignment to the fleet management program.
- Periodic review of goals and performance results: identify and leverage successes plus identify and mitigate improvement opportunities.
Fleet metrics that should be reviewed when benchmarking
The most common characteristics in providing comparative fleet benchmarking data include strategic goals, service programs’ participation, industry, asset class, asset usage, fleet size, and asset location.
Overall financial performance including monthly expense per asset and expense per mile or kilometer should also be reviewed.
Establishing top strategic fleet priorities through benchmarking
The top three fleet priorities for clients identified in Element’s 2022 policy benchmark survey were acquisition planning, inventory management, and safety. Here are some industry insights and recommendations from the survey that clients can leverage:
Industry Insight: While clients consider many factors in determining their best fleet selector, the top three decision criteria include incentives, base invoice price, and OEM relationship.
Recommendation #1: Develop relationships with OEMs that meet your strategic fleet management needs. Relationships are important, particularly in challenging environments.
Recommendation #2: Be inclusive and potentially expand the criteria utilized in evaluating assets for inclusion in your selector. This will facilitate a stronger strategic fleet foundation and can be utilized in your OEM discussions and incentive negotiations.
- Inventory management
Industry Insight: 75% of respondents reported driver position as the largest decision criteria for driver eligibility for a fleet vehicle.
Recommendation #1: Evaluate the true needs of your drivers to ensure that they are in the proper asset class. This evaluation will help you to balance total cost of ownership (TCO), as well as the environmental, productivity, and safety needs of your fleet.
Recommendation #2: Assess your inventory regularly to identify assets that are fully utilized versus under-utilized. If the asset will be under-utilized for a brief period, continue to monitor its usage. If the asset will be under-utilized for a prolonged period, consider reassigning the asset to another driver for greater utilization or terminating the asset from your fleet.
Industry Insight: 66% of respondents incorporated documented fleet safety and accident policies in safety programs.
Recommendation #1: Utilize proven components in your safety program: incorporate motor vehicle record assessment and monitoring, advanced safety options, and connected data/telematics, as the best accident is one that never happens.
Recommendation #2: Document and regularly communicate your safety policies to your drivers. Incorporate ways to recognize favorable driver behavior.
Case study – client reduces TCO and strengthens partnership
Optimizing your fleet with trending data
Element’s live policy benchmarking tool collects data to understand what’s important to clients. It also allows us to identify historical policy trends and ultimately, relational connections among various data points.
We can perform analysis based on policy benchmarking and determine the impact of those policies on your fleet’s performance.
Having the right goals and strategy will help you to meet desired performance metrics. We can partner with you to build a better-in-class or best-in-class fleet management program, by first developing SMART goals and then preparing a strategy in support of your overall corporate vision.
Are you ready to take action?
Get in touch with us for insightful policy benchmarking data to develop or update your fleet policies.
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