The purpose of this post is to expose the truth about fleet utilization audits, Vehicle Allocation Methodology [VAM] flaws, and provide expert testimony on approaches that work … and importantly those that do not.  The content is based on years of fleet utilization audit experience and anecdotal evidence from our clients that now use Bishop Fleet Optimization [BFO] after their previous efforts failed.

Mileage Standard Fallacy:  Mileage based vehicle analysis (Vehicle Mileage Traveled [VMT] is the latest term) has been used as the quick and easy audit option by leasing companies and less reputable fleet consultants to optimize fleets.  The problem is that mileage analysis has little correlation to actual fleet requirements.  We are sure the reasoning below will make good sense. 

Vehicle mileage analysis often misconstrues that lower mileage [e.g. 1,000 miles per month] means a vehicle is underutilized.  Lower overall mileages are justifiable at times if a vehicle typically travels short distances [e.g. 5 miles] and parks at client sites for longer durations [e.g. 3 hours] due to the type of service being performed.  Two visits/day multiplied by 23 work days per month means the vehicle in this example would travel only 460 miles per month [2 visits/day x [5 miles x 2 trips including return] x 23 work days/month] making it a disposal candidate.

In contrast, higher mileage vehicles can also be incorrectly evaluated when using mileage analysis.  A vehicle may travel many more miles than required due to inefficient home base positioning relative to clients, insufficient trip planning and poor route selection.  Mileage standard thresholds [e.g. 1,000 miles per month] ignore whether the vehicle traveled home each night, destinations visited during work hours and the use efficiency [e.g. did a vehicle make one or many trips to clients on the same street?  No one knows]. 

BFO has used its GPS units to audit fleets with mileage analysis being used to optimize vehicle numbers.  We still found 20%+ vehicle average reductions were possible in those fleets which is a similar result that we see for fleets that do no analysis at all.  Mileage standards have a low correlation with fleet utilization requirements and should never be used.  There is no substitute for accurate trip-by-trip data.

Logbook Audit Issues:  People that have executed logbook audits to determine fleet utilization will tell you the same thing … it is cumbersome, resource intensive, inaccurate and findings are rarely implementable.  Why?  Logbook data is typically 40% inaccurate.  BFO has performed comparisons of logbook data versus actual GPS data and we regularly find large logbook discrepancies.  The discrepancies are caused by trip omission, illegible hand writing, vague destination descriptions and clearly falsified logbook entries.  The same logbook inaccuracies occur no matter how much QA resource is assigned due to these human factors.  Staff are generally poor data collectors especially when it is their utilization that is being analyzed. 

The logbook data input phase is resource intensive and should never be underestimated.  Data input extends the project duration between project start and findings presentation which often provides a reason for staff to complain that the data is out-of-date. 

The poor data quality provides a valid rebuttable to any attempts to remove vehicles.  BFO has yet to see a logbook based audit that has fully implemented its findings.  Most will achieve a small saving [e.g. 1%] but it is nowhere near the 20%+ that a typical BFO GPS audit will provide.  Remember that BFO savings are made with no impact of service delivery.  We simply lower vehicle availability to 100%.

Vehicle Booking Accuracy:  Vehicle booking system output is often touted as a proxy for logbook analysis.  Our company completed a comparison of booking system data versus actual GPS utilization data in Dec 2011.  The booking system regularly overstated vehicle use by 33%.  The reason was that meeting times would be change or cancelled but the vehicle booking was not modified or deleted.  Hence the data was a poor source for optimizing fleet vehicle numbers.

Utilization Snapshot:  It is well known that most vehicle utilization patterns repeat themselves on daily [e.g. each day from 10-11am], weekly [e.g. every Tuesday] or monthly [e.g. first Monday of each month] cycles.  Best practice for the last 25 years or more has been to collect vehicle utilization data over a 5-week period include these all relevant event cycles. 

We agree with this approach entirely.  The utilization data that BFO gathers confirms that this 5-week best practice is correct.  Findings must be adjusted for seasonality but patterns are clear.  See a graph example at that shows a typical pattern across 5-weeks.  The graph shows utilization spikes each day during business hours as one would expect.

Avoid Permanent GPS Installation:  It does not make sense to purchase GPS units when all you need is a 5-week utilization snapshot across the fleet.  The purchase cost and monthly charges make permanent GPS installation an unpalatable option so should be avoided.  Look for a temporary GPS installation option.  At the time of writing this post, no off-the-shelf GPS technology was available and only BFO offered specialized GPS with the 5-wek rental option.

So what’s left?

The Game Changer:  The ‘new’ Vehicle Allocation Methodologies being touted by some fleet consulting firms unfortunately perpetuate many of the above audit problems.  Bishop Fleet Optimization has taken it on themselves to invest millions to turn the situation around.  Our company has now introduced the world’s first temporary-install GPS technology that is specifically designed for fleet vehicle utilization audits.  Demand for the service has soared since its launch in 2008. 

Here are some key reasons why:

-       GPS data collection mitigates the human data collection factors so audit outputs are accurate and defensible.

-       The self-install GPS technology takes 1-minute to lock in place and needs no automotive engineering know-how.

-       The 5-week GPS rental meets best practice data collection requirements without the need to purchase expensive GPS equipment.  A whole fleet with a few to many thousands of vehicles can be audited at one time.  It is often the first time a CEO has seen where all the vehicles go once they leave the front gate.

-       BFO designed GPS units can ‘see’ through 16 story buildings so no data gaps occur in ‘urban canyons’ and other places where other GPS units fail.

-       BFO GPS operates for extended periods in areas that have no cell phone coverage.  Most GPS units need cell tower coverage to download their memory to avoid a memory overflow.  BFO equipment does not have this problem.

-       Analysis software is simple to use and focuses on concurrent vehicle utilization at each site to optimize vehicle numbers.  Concurrent utilization analysis using GPS based data identifies the maximum number of vehicles that are simultaneously absent from a site by vehicle type so optimal levels can be determined. 

-       Most BFO clients achieve a 20:1 ROI so the business proposition is attractive. 

-       Accurate BFO data is useful when quantifying activity for business case development.  Our geospatial maps turn millions of data points into easy to understand pictures that make selling fleet changes a straightforward process. 

 Conclusion:  We hope that this post clears up many of the misrepresented ‘facts’ that are present in the fleet industry.  Consider a 5-week GPS fleet utilization audit as part of your Vehicle Allocation Methodology or fleet audit process.  It makes sense when you consider that facts above. 

Remember not to bundle Fleet Utilization Audits with other fleet management RFP content.  Utilization audits are a specialist job and many fleet consulting firms do not have the experience or technology to do them well.  Do not venture down the path of mileage standards even if the analysis is free.  Leasing companies use this to provide comfort that all is OK when you may have 20%-30% surpluses. 

Contact us to find out more about how this new fleet vehicle utilization audit option can help.  This movie is also a valuable tool to use when selling the need for an audit in your organization.

Author:

Derrick Bishop – Managing Director

BISHOP FLEET OPTIMIZATION