Monitoring fleet utilization for the justification of equipment needs

Tom Platt
President
Management Partnership Services, Inc.
North Wales, Pennsylvania

Nobody ever disputes the fact that public works organizations rely on vehicles and equipment to perform their jobs. Yet justifying the purchase of new or replacement equipment is extremely difficult during slow economic times, even for mission-critical units. Managers need to use all the tools at their disposal to ensure they obtain and retain the equipment needed to provide effective services. Using readily available data to actively monitor, analyze, and report on fleet utilization is one approach that deserves renewed attention because this type of analysis can greatly improve the financial and operational justification for the acquisition or replacement of equipment.

Good stewardship demands that managers maximize the return on the public's investment in fleet equipment. Getting the maximum possible utilization from each unit and retaining the smallest possible number of units in the fleet consistent with achieving the mission demonstrates this commitment. It will also increase the level of trust on the part of the elected officials who must approve fleet expenditures, and will place the public works manager in a more influential position when it comes time to justify the acquisition or replacement of critical equipment.

There are three potential sources for utilization data that may be available to a public works organization: 1) Basic asset data from a fleet management or asset management information system; 2) Fuel transaction data from an automated fuel dispensing system; and 3) Operational data from a myriad of sources, such as dispatch logs, job costing systems, employee time records, crew assignment logs, or similar. The utility of each of these three categories for utilization monitoring and management is described below.

Basic fleet inventory data
Data that falls into this category includes basic asset information such as vehicle age, meter (odometer or hour) reading, cost, and unit type or class code. Even with this most basic of data, some useful analyses can be conducted. A variety of simple utilization statistics can be calculated for each vehicle and equipment class, such as mean age, median age, mean life-to-date utilization, and median life-to-date utilization. Individual units can be compared to the averages in order to begin developing an understanding of the overall utilization within a class.

Using these same data to represent utilization visually by means of a scatter plot, such as those illustrated in Charts 1 and 2, provides another useful method of analysis. It is relatively easy to identify underutilized units and the appropriateness of the overall utilization pattern with this approach. For example, the fleet in Chart 1 is comparatively older, on average, than its peer fleet in Chart 2. In addition, Chart 2 displays a utilization pattern where individual units are grouped more tightly around the average, and this fleet does not have the preponderance of old, heavily-utilized units seen in Chart 1.

Fuel transaction data
Scatter plots and averages provide a sense of overall utilization, and the current age and meter reading sheds some light on how an individual unit compares to its class or the fleet as a whole, but they don't help diagnose how an individual unit is utilized over time. It only provides a snapshot of utilization as it stands at the time of the analysis. Adding fuel transaction data from an automated fueling system to basic asset data permits an increase to the level of sophistication in the analysis.

Motorized equipment operates on fuel. Whether a unit contains an hour meter, odometer, or neither, or whether it is generally operated on the highway, local streets, or idling at a job site, it is consuming fuel. The frequency and timing of refueling can reveal much about how a unit is, or is not, being used. Many different analyses can be conducted, depending on the extent of data available and the particular needs of the organization. One such analysis is illustrated by Chart 3. This chart illustrates the frequency of fueling for each unit within a class. High numbers of fueling transactions for some units, and low numbers for others within the same class may indicate, for example, that some newer units are being favored over older units in the fleet, implying that an opportunity exists to even out the overall utilization in order to increase the average life cycle for the entire class of equipment.

Operational data
The third and last category of fleet utilization data is potentially the most beneficial for analytical purposes, but is also generally the hardest to come by and the least well-defined. Ideally, fleet organizations would keep a daily dispatch log for each fleet unit, but this is rare. Several potential surrogate data sources may exist, however, that can lead to the same information. Employee time records, a public works job costing or work order management system, or even a manual work tracking board in the shop can provide an indication of which employees are assigned to what tasks, and for how long. If particular units can be linked to a single user or group of users, or to a particular job or series of jobs (a bucket truck to a tree trimming crew, for example), then a picture of the day-to-day utilization for a fleet unit can be constructed.

Operational data such as this can further refine the utilization pattern revealed by fueling data. A light truck, for example, may fuel once or twice per week every week, providing an indication of regular, consistent utilization. But operational data may indicate irregular use during the week, such as every Monday through Wednesday only. This can provide an opportunity for cross-utilization that may not have been apparent from the fuel data alone. Alternatively, this data may also indicate an opportunity to change the specifications of a unit to reduce the total number and cost of units in the fleet. A possible example is the organization that must use a separate pickup to tow a compressor or generator to a job site. A more effective strategy may be to specify a vehicle where these items can be mounted on a complementary unit already being used at the job site, thus reducing the need and expense associated with the additional pickup. Chart 4 illustrates the daily utilization for a group of similar units over the course of a one-month cycle, and is illustrative of this type of analysis.

Conclusion
Today's difficult economic times and tight budgets are making it ever more difficult to justify the purchase of a new piece of equipment, or the replacement of an existing unit that has reached the end of its useful life. The responsible public works manager recognizes that he or she must continually ensure that the fleet is being utilized effectively in order to earn the trust of those responsible for the allocation of scarce capital. Making use of all available data to continually monitor and analyze fleet utilization is not a magic bullet, but it does place another valuable tool in the public works manager's hands, and helps to ensure good stewardship of the public funds while securing the equipment the department needs to provide superior services now and in the future.

Tom Platt can be reached at (301) 610-0685 or at tplatt@mpsconsultant.com.