Episode 126 The ABCs of Fleet Performance Metrics

Welcome to episode 126 of the Fleet Success Show. I'm your host this week, Tony Yankovich. I'm the director of fleet consulting here at RTA Fleet. Today I'm joined by Mark Canton, head of product and consulting for RTA, and one of our lead fleet analysts, Kristi Emigher. Kristi is also a data scientist. We have covered the topic that we're going to discuss today before, and we've kind of circled around it in many different ways. But today we're really going to step back and take an introductory look, and we're going to call this episode a discussion of the ABCs of fleet performance metrics. So we're really going to step back, start from the beginning, and walk you through the process of why we want to do this and how we're going to do this and what should we do. So let's start it off. I guess the most basic question is, why should we take the time and make the effort to track performance in our fleet organizations?

Well, I mean, fundamentally, we all should be trying to continuously improve. And realistically, if we're not measuring our performance, then there's no way to know if we're improving or getting worse or remaining the same, etc. So at its core, it really begins there. I'm going to steal a line from you, Tony, that I've heard you say in talks before. You know, you got to keep score to win. And so it's really that that fundamental, I think. But I think then beyond that, you know, by measuring, you can provide all kinds of insight. Are you progressing towards your goals? Are you going to achieve your goals? You can try to assess what are your strengths, what are your weaknesses, and then make good strategic decisions from there, right? Do I double down on my strengths? Do I try to avoid some of these weaknesses somehow? And really make good informed decisions, right, to try to optimize your operations. To try to be efficient with your resources and so forth. And then last but not at all least is it facilitates accountability, right? So very similar to what I said earlier, folks need to be held accountable for their work if we want them to consistently succeed and exceed the level of performance that we're looking for. So in my mind, I think it really begins there. And that's a really key question because you actually want to make sure the whole organization is on the same page. So later on when we start talking about the metrics and the things to do, one of the things I think that's key to this question is repeat early and often, early and often. Everyone should know these are the metrics we care about. These are the things we're focused on right now. It should be recitable, kind of like when Josh is with us at our RTA shows and people say, what are our core values? And the whole company can recite humble, hungry, smart, right? I think the same should be true about the performance metrics, especially the ones that are, you know, kind of being zoned in on for whatever, for that quarter, that year, that time period, uh, whatever is associated with our goals, right?

So, well, and I think, Mark, you're exactly right. And I think the other thing that— I'm a lot older than you, but when we got into this business, into this fleet industry, you know, decades ago, um, people took the fleet experts at their word. They were the experts in the field. They They were the experts in the industry. And so the organization, whether it be the CFO or the CEO or the city manager, they would come to the fleet manager and just automatically believe them, automatically respect their decisions because they were the expert. I think today, in today's world, today's society, that's not going to cut it anymore. We really have to be able to demonstrate that not only are we the experts, but we have the data to support you know, whether it's a recommendation, whether it's a request for new equipment or a request for new staff. So I really think that's important to now back up your gut feeling with, with, with hard data.

Great point.

Well, good, good. So, what are some of the key concepts and tips that, that you guys would give, Mark and Kristi, for, for tracking and doing fleet performance metrics?

The first one would be to have a plan. You need a plan of where you're going to go and also to know what data you need for that plan. If you don't know what you want to track or why you want to track it, then the numbers will just be numbers.

Well, that's a good point, you know, and one of the things that we'll talk about in a minute is establishing that baseline. You know, we often talk about, you know, a number is just a number. So if, if someone throws out a number, hey, we're at 75% PM compliance. That number doesn't mean much to anybody outside of the fleet industry. So what we want to do is not only be able to say where we are, but, you know, let's track that over time. So having a plan, Kristi, I think is a great start.

Kristi makes a great point. It's just my experience that a lot of organizations will, they'll buy a new software or a new piece of technology. And they're aware of all the things they can do with it. But there's almost this false expectation that by purchasing it and installing this piece of telematics or buying this FMI is going to somehow magically create all of the things that they want. And it doesn't, right? You need a plan. And getting your hands on that technology is only just step one. It's a piece of the plan, right?

Throughout my career in the consulting world and helping fleets, you know, optimize their fleet staffing levels, you Generally, that focus has always been on technicians. How many technicians do we need to support the workload that we have? Nowadays, it's how do we get the right people with the right skills to help us analyze and look at this data? You know, and again, there's, there's not a whole lot of people out there with those skills. So really what you need is you need someone with the skills and understanding of the fleet industry, but also knows how to interpret data and then knows how to identify trends and look for what the numbers and what the data is telling us. And that's why, you know, someone like Christy, who's a fleet analyst with a data science background, is exceptional at what she does. So she knows the fleet industry, she knows how to get to the numbers, she can read the trends and read the output of the fleet management information system, and then can tell the story. So it's very important to have the skills in addition to having the plan.

Right.

We have— you need to know the objectives that you want to reach. The person can just get— provide the numbers, but if they don't know what objectives you're trying to reach, they don't know what data they need to start tracking. So you need to have an objective— clear objective or goal in mind when you're starting to create this plan.

Right.

Well, absolutely. I, you know, what is our objective as a fleet organization? You know, we talk a lot about the balance between service levels and cost. You know, one of the guys that we used to work with and was a premier thought leader in the industry used to always say, anyone can provide the highest level of service if cost was not an object. But however, what we have to do as a fleet organization today is really balance those. So what we want to do is provide a very high level of service, but at a reasonable cost. And how do we know where we are on that continuum if we're not cracking and reporting on this information.

Yeah, that's a great point. I think that if folks get nothing out of today's podcast, walk away with that, that everything that you measure should have a cost component to it or be somehow translated or tied to cost so that you're looking at both sides of that. Right. It's really a great point. And then also so you can tell, you know, hey, if If we're not getting a high level of service and our costs are great, well, that's the other side of that spectrum to your point, Tony. So, you know, you really need to kind of zone in on that. And I think the way to sort of begin to accomplish that is knowing what your objectives are, right? So, you know, and everyone can do this. You don't need to be a data scientist—no offense, Christy—to be able to determine what are the objectives of your organization, right? So, you know, hey, what, you know, maybe it's, you think you're the fleet manager and you know for sure you need more techs, but you're having a tough time proving it to leadership, right? Okay, well then what is the data that I need to establish that, right? Maybe I need a parts technician. I have plenty of techs, but we don't have a parts person and it's getting in the way. It's making us less efficient, you know, whatever it may be, right? I mean, maybe you're just not replacing your vehicles. So whatever it is, you need to figure out how do I tell the story. Or maybe you think you got this great team and yet the outputs are just not there, and you're searching for what's the cause of that, what's the root cause. It might be that, you know, your PM compliance is terrible and your operators are not getting you the vehicles in a timely manner, and there's just nothing else you can do. So try to figure out what are you trying to accomplish, or what story are you trying to tell, and kind of It's sort of two ends of the coin there. There should be goals, there should be objectives, there should be things I'm trying to get to. And you need to know the performance measures that let you know, did you accomplish that goal? But then also in today's time period, there also needs to be a sense of what's the narrative here and figure out what data points are going to be key for helping you to tell that narrative or determine what that narrative is going to be. So I think that's really a key piece. People go into it and again, they want to measure, they want to measure, but they don't know what their objectives are. And so they either measure everything or they measure nothing or they get overwhelmed. And, you know, next thing you know, it kind of falls apart for them.

So, which is what you bring up a good point. You need to have the critical few objectives when you start out. Don't get caught up in, I need to track this list of 100 different metrics. Those millions of metrics available, you need to focus on the key ones that you need to tell your story or accomplish your goal. You can always add more metrics to track annually. Well, exactly, Christy.

And, and one of the, one of the CEOs that I really like to, to read is Jack Welch. Jack Welch was the CEO and was the, the change agent for General Electric, GE, when when they had that transformative change to go from a struggling organization to one of the largest, most efficient, well-run organizations in the world. And that's exactly what Jack Welch had always leaned on is let's take care of the critical few issues that we really need to focus on instead of trying to do everything. You know, you're never going to be able to address everything at any given point. So, let's pick out the most important and let's focus on those. So that's an excellent point. You know, and I think the other thing that kind of ties into with what we've been talking about, and you know, the telling the story and identifying a plan, is everyone within the fleet organization and within the overall organization needs to be on the same page. You know, so many times the fleet manager goes through the exercise of developing goals and objectives and KPIs and establishing the benchmarks and identifying where they are, but then that information doesn't trickle down to the rest of the fleet staff. So the technicians and the employees and the parts people, the analysts within the fleet organization, they all need to be on the same page. They all need to be aligned with the organizational objectives and making sure that everyone's working towards a common goal. And if we don't establish what those KPIs and those performance metrics are, there's no way we can all be moving in the same direction towards that common finish line.

Yeah, that's a great point. I think, and I think that's the fundamental concept of the plan, right? Again, pause. And literally, when we say you need a plan, we mean that in the literal sense. Like, stop and write down and create a plan. It's not a vision. It's not a goal. Or that's, you know, here is the plan. This is the goals we're trying to accomplish. This is the data, right? So we have the objectives. This is the data we need it. How are we going to collect it? Okay, we're going to use this software or this technology. How are we going to make sure the data being entered is okay? All right, well, now we need policies and procedures and processes around collecting that data. Who's responsible for what? Who, et cetera, et cetera. And that needs to be established. So it's much, much bigger than any one piece of this. The plan really enumerates all of these items that you're pointing out. And even you can start to talk about, you know, defining success, right? We're going to look at, to Kristi's point, to your point about Jack Walt, right? These are the critical few. These are the KPIs. That we're going to define success by. If we hit this number, great. If we don't, then we didn't go there. And then that leads us right into something that I know also you'd like to talk about, Tony, which is establishing a baseline, right? You got to get to that. Where are we today?

You got to start somewhere, right? Exactly right.

And then make your goals realistic around that, right? Don't get caught up. People ask us all the time, well, what's the industry benchmark for? And, you know, That's great. We're happy to share that. But we feel that oftentimes that takes you off of focus of what the goal needs to be, right? If you're at 50% PM compliance, it's going to be tough to get to 95% PM compliance next month. It's possible, but it's going to be tough, right? So how do we move the needle, right? And really benchmark against yourself so that you have that continuous improvement concept. And don't get me wrong, keep pushing. And when you're— as you continue to grow and progress, yeah, now start shooting for those industry benchmarks. But don't get caught up in them because they'll just get you down and you'll throw your hands up and you'll say, hey, this is, you know, we're never going to get there. We're different. Then you start, you know, then we start getting Tony the "we're different" talk that we get from so many different fleet managers, right?

Yeah. Yeah. You mentioned benchmarking. You need to actually— you start tracking them and then you need to Report on them regularly. You need to have key times where you're going to look at them again. So quarterly, annually, sometimes even monthly.

It depends on the metric. Absolutely. And I think the nice thing about KPIs now in most organizations using a fleet management information system now have the opportunity to look at, you know, real-time data. There are dashboards, you know, as part of your fleet management information system that at any given time the fleet manager or the fleet supervisor, and even the customer groups have access to this information. And they can, you know, on a moment's notice, whenever they have the urge, can go in and look at things like, you know, PM compliance rate or the status of vehicles. You know, is it in the shop? Is it waiting for parts? So use the technology to your advantage, but don't rely on it solely. So I think, you know, not only do we want to report on this stuff on a regular basis, and again, Christy, I agree with you 100%, quarterly at the minimum, you want be pushing this data out to your customers and your clients. You don't want to wait for them to come and ask you. I think it's very important to develop these standardized reports. And again, we're not talking about a 50-page quarterly report. We're talking about a 2 or 3 page maybe report with some nice illustrations, some nice graphics, some charts and graphs that show, you know, our accomplishments over the last, you know, quarter, over the last year, and how is that trending over time? You know, Mark and Krista, you guys spend a lot of time with data and looking at it and evaluating it and assessing it to determine, you know, the success of fleet organizations or, you know, identifying weak points within the organization. How important is it to look at data from period to period? Oh, it's everything.

It's very important to— yeah. If you only look at it annually, you can't address a problem until you discover it. So by looking at it regularly, you can immediately jump on a problem. If you see that the athletics department all of a sudden has high costs and low availability, you can then go to them and see what's happening with the vehicles, why, and address the problem before it becomes a much larger problem. Right. Before it's too late, essentially.

You can monitor trends. You can— and so forth and so on. That's exactly it. And to your point a second ago, Tony, just to go back and dovetail, you know, you talk about pushing out the reports to customers and so forth. And I would also add to that, I'm sure you'll agree, also to leadership, to the people above you. You never want to let ignorance be an excuse or be claimed by anyone around you that they didn't know. And then, that ties back into the frequency point. Christie's making, right? If you only report annually, well, nobody knew all year long that this bad thing was happening. So there was no opportunity for folks to do something about it or be responsive. And so again, using it— I mean, I know I beat this to a dead horse— using it to tell your story is more than just in the annual report. It's literally in every conversation. Hey, hey, John, you know, you guys, you haven't been getting the vehicles in. You know, and they'll say, oh, come on, I'm always great. I've been great for 3 months. Yeah, you were great for 3 months, but you weren't good this month, right? And so we can, you know, we can stay on top of things in that regard. So I think it's really important in that way. And then the other thing is they should be everywhere. So what do I mean by that? So Tony mentioned, you know, reporting them to customers. I mentioned reported to leadership. Christie points out, you got to look at them all the time, but they should all tie together. So for example, if I were a fleet manager today, my performance evaluations for my staff would absolutely have metrics related to them that feed into the larger organization metrics. So if I'm trying to measure, for example, make sure all of my facilities met a certain productivity rate, Well, then in my individual technicians' performance evaluations is going to have their productivity rate. They're going to be measured on that, right? So, you know, I'm getting a little bit past, you know, ABCs, I guess. But, you know, thinking in those critical few, those critical few should be everywhere. They should get repeated and repeated and used in virtually everything that you create from what I can see.

Well, so true, Mark. And, you know, the other thing that I think is important, and really this comes back to the basics, but, you know, when we're looking at your performance or your KPI within your fleet organization and, you know, we know there's industry standards and industry benchmarks and that's a great place to set your goal. But within your own organization, you don't get caught up in comparing your performance with you know, the neighboring trucking company or your, your biggest competitor in the trucking industry or, or the, the next door city or county operation because you're really, you're really not sure what exactly goes into the calculation of those metrics. You know, Mark, you, you tell a lot of stories about, you know, calculating your fully burdened labor rate, you know, and simply comparing your labor rate with another shop labor rate Yeah, that's, that's okay. But you really have to be careful because a lot of that time, you know, maybe the, the shop that has a lower labor rate, maybe they're not tracking and including indirect costs. Maybe they don't include utility costs in their shop because that's picked up by the general fund or something like that. So I think it's really important that you understand in context what your benchmarks are. And then to, to go to, again, to circle back around to that plan, Mark, you made a comment earlier about you know, you, if you're at 50% PM compliance rate, you know, no one expects you to jump to 95%, you know, within the next 6 months. And that's why it's so important to have that plan. And maybe it's a 5-year plan where we're stepping up to that final target or goal or objective. So, that's the importance of having a plan, identifying who's going to be accountable to measuring that, to managing that, to making sure that, that we're meeting our interim goals so we make sure that we get there eventually. So I think those are very important things. And then one other comment that I would like to make, and I'm sure the listeners on our podcast and the viewers haven't missed an episode up through this one. So this is just repeating one that we talked about, Mark, in one of our earlier episodes about why would you hire a fleet consultant. And, you know, oftentimes, and we We say this all the time. You know, we are brought in as fleet consultants to look at an operation, not because that operation is doing poorly necessarily. It's simply because the decision makers and those people in charge, they have no idea. They have not been shown the data to support whether that operation is doing well or not. So I think it's really important that, you know, we're using that data, we're sharing that data, we have a plan, and then, you know, letting others know how we're doing. You know, we really need to be a transparent organization. Organization. Yeah.

And connecting all of the dots is, is really the key to that. It's a good point. We wouldn't— if folks were reporting regularly, consistently, and really focusing in on those critical few, in many cases, you're right, probably consultants wouldn't be brought in because leadership would have a higher level of confidence of that they know what's going on and that they understand what's going on and that things are going on well.

So, yeah. One of the things that we as fleet analysts, as data science workers in the fleet industry, as fleet consultants, we are asked no matter where we go, and that is, what should we be tracking? So can you guys go through maybe your top list of KPIs that, you know, someone just starting out today should be looking to track?

I think that probably the number one is your availability. Absolutely. Okay.

Talk a little bit more about that, Kristi. What exactly is availability in the fleet industry?

It's your assets are available versus unavailable. So you need to know what percent of your assets are available at any given time.

Well, exactly. And if you have what we call, you know, rollout requirements, whether it's a transit organization, a school bus organization, solid waste is huge, law enforcement where at the beginning of every shift we need 38 vehicles to hit all of our routes. So you need to make sure that you're hitting those availability numbers. And again, if that vehicle is not available, the people that that are relying on the fleet organization to provide those assets are not doing a good job. They are not able to fulfill their missions if they don't have the tools necessary to do that. So what other kind of benchmarks and performance metrics should we be tracking?

Well, again, I'll dovetail quickly on availability because if you don't have high availability, necessarily you have a larger than necessary fleet or you're hemorrhaging money somewhere else in rentals and so forth. One of the things that's interesting about it is, I mean, think about your own car. If you— if, I mean, once in a while you got to bring it into the shop, but if you didn't have access to it, let's say you only had access to your shop 50% of the time, or 70— excuse me, your car 50% or 75% of the time, you think to yourself, man, this car is no good, I need a different car, right? Like, what's, what's the point? And yet people look at their fleet availability and that same kind of bell doesn't ring true for them necessarily. So When people ask me about the benchmark number, I mean, I can give it to you. Yeah, it's 95%, but all you got to do is think about if you need your vehicle to get your life done, what do your operators need to get their work done? It should be through the roof. The goal should be 100%. So it really is the capstone metric. And as, you know, as Kristi pointed to, when that's not right, then you could start looking at the causes for that. To not be right. The other piece, though, that's going back to your point, Tony, is, you know, let's say you have 100% availability, but it's cost you 3 times what it maybe should cost you. So you just can't have performance metrics without having cost tied in somewhere. Cost has to be one of the critical few that you're looking at. And ultimately, as you progress, you want to really try to tie cost to all of your metrics. In some way, shape, or form. So if we say, you know, everyone talks about PM compliance, which is simply, you know, what percentage of vehicles are on time for their PMs? Okay, great. As you get past 101 and you get past 202 and you start getting into 303, well, what does that cost you when they're not compliant, right? That's what you're shooting for down the road. But back here at ABC level, it's really pretty simple. Are your vehicles available? And what is the fleet operation costing you and is that reasonable? And if the answers to those two questions are, yeah, we're good, we got all, we got our assets available and our costs are reasonable, then, then you're a gold standard fleet. Uh, it's, it's, it's really that simple, uh, in, in my opinion. So start there, cost and availability.

Well, absolutely, Mark. And I think the important thing, and you kind of touched on it earlier, is, you know, let's start there. Let's We have to have a baseline. We have to start somewhere. That's a great place to start. And once we get a handle on that, guess what? Next quarter or next year, we can start tracking some additional areas of performance.

All of the other metrics that we might talk about down the road with you are going to stem from this availability and the cost. You know, they're going to be digging deeper in a more refined way at a more specific piece of your operation or your fleet program. To try to get that particular portion up and running to the standard that you want.

So, well, awesome. You know, we really appreciate your time and effort today, Mark and Christy. You guys are the foremost leaders in the fleet industry when it comes to data analytics. You guys are sought out often for speaking engagements, for training, for consulting to other fleets. So we really appreciate your expertise on this. Podcast today. So a big thank you for that. And also thanks for tuning in this week, all the viewers and listeners to our podcast. If you have any questions or need additional information about today's discussion or about anything, please don't hesitate to reach out to me, reach out to Mark and Christy. You can email our show at podcast@rtafleet.com. Also, we ask you to share our information, share the podcast with your friends, your coworkers, your colleagues, other fleet organizations, and we welcome any feedback. And one of the things that we're always looking to do is find out what you guys, what listeners, what you guys want to hear us talk about. So please submit your suggestions for new shows, new episodes, and we would love to hear what your wanting us to talk about. So with that, we will sign off. Have a great day, and thank you very much.