Ed Smith, President, Agile Fleet
Understanding your fleet’s utilization is at the core of fleet right-sizing. Many fleets undergo fleet utilization studies as a first step towards getting their fleets right-sized and under control.
But how is a fleet study conducted? How often should it be done? How do you articulate the goals of your study? What changes should be made as a result of your study? We hear these questions and many more on this topic, so here is some guidance you may want to consider.
We believe that fleet utilization studies are something that should be done continuously because fleet needs and conditions change frequently. Some organizations require or recommend you do a formal study at fixed intervals. For example, GSA Fleet recommends that a Vehicle Allocation Methodology (VAM) survey be done every five years. Or, you may perform a utilization study to validate desired objectives such as purchasing new vehicles.
Whatever the reason and timing for your fleet utilization study, you should follow an established process that has clear objectives. We recommend taking a couple of steps back before jumping in to the “how” and the “what” of a utilization study. First understand “why” you are performing the study.
Common reasons utilization often gets out of control in a fleet, and the reasons utilization should be revisited frequently, include:
- Insufficient data to understand basic fleet demographics and use.
- Lack of fleet technology to easily understand utilization.
- Lack of formal policies for acquisition, use, and disposal of vehicles and equipment.
- Failure to adjust the size and composition of the fleet as organizational needs change.
- A desire to keep old vehicles “in reserve” rather than dispose of them.
- A tendency to manage the fleet size based on historical budgets.
- Reluctance to change “because that’s how we’ve always done it.”
At the highest level, goals of a fleet utilization study are ultimately to capture and present vehicle use metrics in a way that provides a clear understanding of utilization. Ultimately, the study will help you to make changes needed to operate the fleet more effectively by:
- Providing the vehicles your enterprise needs to fulfill its mission efficiently.
- Maintaining the right quantities and types of vehicles readily available at the right location at the right time.
As basic as the goals of a fleet utilization study sound, it’s not uncommon for directives such as “we need to reduce the fleet by 5% across every department” to be the driving force behind your study. With a clear understanding of the result that the organization is attempting to achieve, and with a sound fleet utilization study process, great things can happen.
A high-level review process starts with capturing baseline metrics and ultimately making changes to your fleet, revising the process, and starting over. The process of completing a fleet utilization study will be continuous.
How aggressive you are in making changes during your continuous efforts is up to you. A great example of this is provided in the statistics from a client that our team worked with. Although their utilization statistics revealed they had more than 100 too many passenger vehicles, they simply didn’t believe it. They initially reduced their fleet by 10 vehicles but vowed to “reduce more vehicles on the next pass of the utilization efforts”. After nearly ten iterations of reducing vehicles over the next few years, their total reduction was 117 vehicles without impacting any drivers. This was more than 50% of the fleet’s original 226 vehicles. The fleet realized more than $1.5M in savings over five years.
Getting started may be the hardest part of any initiative. The good news is that there is no reason to start from scratch relative to defining what a utilization study should look like. Consider downloading our free e-book that was developed with the folks at NAFA. The Ultimate Guide to Understanding Fleet Utilization & Achieving a Right-Sized Fleet has a detailed chapter that offers step-by-step guide to conducting your fleet study to get you started. This resource was written by fleet experts within Agile Fleet and NAFA Fleet Management Association with thousands of hours of experience working with both public and private organizations. Get your free copy now at https://info.agilefleet.com/ultimate-guide-to-fleet-utilization
If you have additional questions, we would be happy to answer them. Feel free to reach out to us at [email protected] or request a consultation. Visit us at www.agilefleet.com or give us a call: (571) 498-7555
