Gathering and reviewing fleet management analytics is essential for any business with vehicles on the road. Why are these analytics so important?
In this article, we answer that question and discuss tips for using fleet management analytics to the fullest.
Table Of Contents
- Components Of Fleet Management Analytics
- Analytics, Total Cost Of Ownership, And Vehicle Cost Per Mile
- Benefits Of Fleet Management Analytics
- Tips For Using Analytics
Components Of Fleet Management Analytics
Fleet management analytics is a broad category of data collected from various sources of a business that can be used to improve efficiency, safety, and cost-effectiveness.
The three key components of fleet management analytics are fleet management software, fuel card software, and telematics. Here’s how each one contributes to the success of fleet-based businesses.
Fleet Management Software
Fleet management software is a set of tools that makes it easier for owners and operators to monitor and organize many of the vital variables within a fleet, including:
- Location
- Compliance
- Maintenance schedules
- Driver safety
- And more
In some cases, fleet management software may also include features such as GPS tracking and navigation, Electronic Logging Devices (ELDs), and other useful tools.
With these tools in hand, managers can control the expenses associated with all vehicle activity and how those expenses impact the total cost of ownership for a fleet.
Fuel Card Software
Fuel card software (and the fuel cards that go with it) is a technology that helps owners, operators, administrators, managers, and drivers streamline and reduce the costs of fuel purchases for a business.
For example, depending on the card a business uses, fleet managers can set up spending limits, control purchases, reduce spending, and perform a wide variety of other cost-cutting activities that can help bring one of the major fleet cost centers under control.
Fuel cards and the analytics they provide are a big part of calculating and controlling variables (i.e., Total Cost of Ownership and the Vehicle Cost per Mile) that can have a significant effect on a business’s bottom line.
Telematics
Telematics are installed hardware, applications, and services that can provide near real-time data about vehicle activity, location, and condition.
Fleet administrators can use the data to monitor wear and tear on vehicles, create preventative maintenance schedules, track driver behavior behind the wheel, and a variety of other tasks that can benefit fleets.
As with fleet management software, one of the main purposes of telematics is to help owners reduce the costs associated with fielding a fleet of vehicles.
The data that telematics provides can also help managers monitor another important calculation within the business: Vehicle Cost per Mile (which we’ll talk about in the next section).
Analytics, Total Cost Of Ownership, And Vehicle Cost Per Mile
As we’ve mentioned, fleet operations are a major cost center for any fleet-based business, regardless of the number of vehicles on the road.
How those vehicles are managed has a direct and material impact on whether or not an operation is profitable.
Failing to implement the three core components mentioned in above can cost businesses thousands of dollars per year (and only increases with the size of the fleet).
But, with the right technology set up to provide the necessary fleet management analytics, managers will be better positioned to monitor Total Cost of Ownership and Vehicle Cost per Mile in order to optimize operations.
Total Cost Of Ownership
Total Cost of Ownership is calculated with fleet management analytics gathered from the core technology mentioned in the previous section using the following formula:
Total Cost of Ownership = Fixed Vehicle Costs + Variable Vehicle Costs
Fixed vehicle costs include things like:
Variable vehicle costs include things like:
- Fuel
- Tolls
- Maintenance
- Repairs
Once the TCO for a single vehicle has been run, managers can examine the data points included in the calculation and come up with new ways to use fleet management software, telematics, and fuel card software to reduce both fixed and variable costs.
For example, owners may choose to implement an open-loop fuel card so drivers don’t have to travel extra miles off the optimal path (and use more fuel in the process) to fill their tank.
Vehicle Cost Per Mile
Once the total cost of ownership has been calculated, that data can be used to figure out the vehicle cost per mile using the following formula:
Vehicle Cost Per Mile = Total Cost Of Ownership / Total Miles Driven
As with the total cost of ownership variable, administrators can then use the core technology mentioned earlier to pull fleet management analytics that can help them reduce vehicle cost per mile overall.
For example, managers can examine GPS and fuel card data to reduce total miles driven and even find lower fuel prices so that both total cost of ownership and vehicle cost per mile go down.
Benefits Of Fleet Management Analytics
Reduced Costs
With a robust fuel card solution, owners and operators will be better positioned to analyze fuel consumption patterns, determine where improvements can be made (e.g., optimize routes, eliminate unnecessary idle time, etc.), and reduce costs overall.
Enhanced Efficiency
The fleet management analytics provided by fuel card software and GPS data can help dispatchers take advantage of real-time traffic data, route information, and road conditions (just to name a few) in order to reduce fuel consumption and enhance efficiency throughout a fleet.
Improved Safety
Data generated by core fleet technology can help owners and operators gain insight into driver behavior with the goal of identifying costly behaviors (e.g., heavy braking, heavy acceleration, inconsistent highway speeds, etc.) that lead to a higher total cost of ownership.
Informed Decision-Making
Data-driven insights can empower owners, managers, and administrators to make better strategic decisions regarding everything from vehicle selection and maintenance schedules to driver management and fuel use.
Streamlined Maintenance
Analyzing sensor data from fleet vehicles can help fleet mechanics predict potential system failures before they occur so that the business can prevent breakdowns and minor issues from becoming costly repairs.
Tips For Using Analytics
1) Identify KPIs
With the right tools in place, administrators have more fleet management analytics than they can handle. So they don’t get overwhelmed by the sheer glut of information, they should focus on key performance indicators (KPIs) that align with business goals.
These metrics may include:
- Fuel efficiency
- Miles traveled
- On-time delivery rates
- Routes taken
- Driver behavior
These KPIs can then be used to control expenses and reduce total cost of ownership and vehicle cost per mile.
2) Invest In User-Friendly Tools
Data can be extremely overwhelming if not viewed correctly. That’s why it’s important for businesses to implement user-friendly tools that allow for a clearer understanding of how the analytics affect a fleet.
A fuel card solution, for example, should distill fuel-use and expense information into an easy-to-understand dashboard that eliminates confusion and mistakes.
Managers can then use the targeted information to reduce fuel use, save money, and unlock the potential of a fleet.
3) Start Simple
If a business is new to fleet management analytics, the best way to make it all work is to start simple. That applies to the technology used as well as the data gathered.
Technology
The easiest way to implement core technology into a fleet workflow is with a fuel card solution and the software that comes with it.
This can have the most impact on the day-to-day activities of a fleet and the expenses that come into play while vehicles are on the road.
When fuel costs are under control — or on their way to under control — businesses can turn their attention to telematics and the overarching fleet management software that brings everything together.
Data
As mentioned earlier in this article, the right technology can provide an overwhelming amount of data if not controlled correctly.
Managers shouldn’t try to analyze everything all at once. Instead, they should start simple and focus on one or two KPIs that can have the most impact on the business’s bottom line (e.g., fuel consumption, driver performance, etc.).
4) Train Team Members
Once the data has been analyzed and management has come up with ways to cut expenses, it’s time to pass that information on to the team and train them to work under the new standards.
5) Focus On Continuous Improvement
Regardless of which fleet management analytics administrators collect, it’s essential for businesses to focus on continuous improvement.
In most cases, that will mean examining data several times a year to see if things have changed and if there are more ways to improve fleet processes in order to reduce costs and save money.
Unlock Fuel And Fleet Management Analytics With Coast
The Coast fleet and fuel card can help finance leaders unlock the potential of fleet management analytics with the goal of reducing and controlling both total cost of ownership and vehicle cost per mile.
With the Coast fuel card and online dashboard, administrators can:
- Centralize fleet expenses in one place
- Coordinate and control maintenance costs on the road
- Provide drivers with access to open-loop convenience
- Access real-time reporting
- Receive activity alerts
- Track costs
- Protect against theft and fraud
- And much more
For more information on how Coast can help businesses control fleet costs, harness the power of fleet management analytics, and streamline fleet management programs, visit CoastPay.com today.
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