A few years ago a fleet manager new to his post sat opposite the Fleet News Awards panel and explained how he had axed 10% from his fleet’s fuel expenditure in a single afternoon.
His silver bullet solution? He had examined both his fleet’s fuel expenditure and the mileage it drove and identified such a discrepancy from what he might have expected that he investigated further.
It turned out that the company had made significant redundancies, but had not cancelled the fuel cards of the departing staff.
They had continued to refuel at their former employer’s expense until the cards were cancelled and the fuel bill fell by 10%.
It was a basic benchmarking exercise, comparing actual data with an alternative set of data to measure performance.
And before you cry out that every fleet is unique and that you’ll never find appropriate data to compare your performance with, think of this – musical tastes are almost infinitely varied yet you don’t need to be an X Factor judge to identify the Wagner in the pack.
Benchmarking is a standard business practice in almost every area of every organisation.
Successful businesses consistently monitor and compare their salaries, the prices they charge for goods and services and their customer satisfaction levels against the performance of com-petitors.
As a spending department, it’s vital that decision makers arm themselves with fact-based evidence that their fleet operations are both more efficient than the norm and constantly improving.
Benchmarking is the process that underpins this, that drives the data collection to measure like-for-like with similar fleets, that compares the data scientifically and that forms the basis for future targets and the strategy to improve. Correctly applied benchmarking can drive efficiency and save money.
It’s a procedure that is widely applied in more obvious areas such as vehicle selection, fuel spend, service maintenance and repair (SMR) costs and accident rates, as well as more unusual yet still business critical areas such as fines for non-payment of congestion charges or even the number of knee injuries suffered by delivery staff.
As a business discipline, freight fleets are light years ahead of car fleets in benchmarking, micro-
measuring each area of their operation to identify efficiency gains and financial savings.
For these fleets a 0.5% reduction in fuel bills, for example, could equate to bottom line wins running into hundreds of thousands of pounds.
And the ramifications often go well beyond the fleet department to different areas of an organisation, as a major survey of the UK’s seven largest supermarket fleets revealed.
“Companies were benchmarked on the efficiency of their distribution using fleet fuel efficiency (fuel/km), as well as logistics efficiency (fuel/tonne delivered), and fuel/km tonne,” said the UK Supermarkets 2009 carbon benchmark report.
“Supermarket companies have similar average fleet fuel efficiency, but have very different levels of logistics efficiency.
The most efficient companies used 80% less fuel per kilometre-tonne than the least.”
Even very efficient fleet operations in terms of basic vehicle maintenance and fuel consumption may still be significantly less competitive than rivals if poorly-organised sales or delivery territories force staff to drive further than competitors, or require more staff to serve similar numbers of customers.
“Everyone thinks they are very good, but unless you compare yourself to similar operations you will not know,” says Adrian McMullan, director of L&A Consultants.
So where do you start? There are three basic types of benchmarking. Firstly, comparing drivers, vehicles and departments within your own fleet. How does vehicle ‘A’ perform versus vehicle ‘B’ when undertaking the same journeys.
How do costs compare this week to last, this year to last, even this week to the same week last year, and so on.
It’s of huge benefit to any fleet to use exception reports to identify a vehicle or driver incurring well above average costs.