Benchmarking
A fleet benchmark is a management tool to facilitate the comparison of costs, utilisation and performance. Often for a fleet the precise value of the benchmark is unknown so how do we develop and utilise a benchmark.
Let’s take fuel consumption. It’s an easy to understand benchmark, something fleet managers experience most days, but how do you establish a fuel consumption benchmark?
Initially without a true value we can set an intuitive value that facilitates our management objectives. As an example, we want to identify all petrol LDVs with consumption greater than 14 litres / 100 Kms. Achieving this will identify underperforming vehicles, make / model and drivers. There may be good reason which can result in the servicing, repair, disposal or driver training of those identified. Implementing corrective action will minimise vehicles exceeding this benchmark value.
As you refine your controls a truer value will be identified and ultimately you may decide that you will not procure a vehicle whose consumption exceeds 12 litres / 100 Kms.
What have you achieved?
- You have a procurement and selection benchmark that reduces your TCO.
- You have a management tool to identify exceptions.
- Drivers have a standard to which they have to perform.
- The business has a value to determine training methods and operating standards.
Having a fuel consumption benchmark enables you to calculate the cost of consumption in excess of that value. Aggregate these cost values and manage the trends for ongoing process improvement and cost reduction.
Developing benchmarks is an evolving process. You have to start somewhere reasonable, but as you gain understanding of actual values and then refine, their use as a management tool and value to facilitate process improvement will deliver significant cost and operational benefits.
What benchmarks can you develop and apply in the fleet environment, as examples;
- Maintenance expenditure – have a cpk value for maintenance expenditure
- Servicing and accident repair turnaround times
- Utilisation – daily Kms and active hours, weekend usage
- Driver scoring as per Telematics scoring systems
- Resale values as % of trade book
The single objective of benchmarking is to facilitate the comparison of costs and performance within your business and possibly external competitors. Benchmarking enables the business to identify areas for improvement with maximum cost, efficiency or performance benefits. Re-evaluating benchmarks on an ongoing basis facilitates innovation and continuous improvement.
Have a question?
Contact Nigel Webb - Latitude Fleet Services - nigelw@latitudefleet.co.za