As a fleet manager, one of your primary responsibilities is to ensure that your fleet operates efficiently and cost-effectively. However, achieving this goal can be challenging, especially when dealing with a fleet that is either too large or too small for your organization's needs.
This is where fleet rightsizing comes into play. Fleet rightsizing is the process of optimizing the size and composition of your fleet to meet your organization's operational requirements while minimizing costs and maximizing efficiency. In other words, it's about finding the perfect balance between having enough vehicles to meet demand without having excess capacity that goes unused.
But why is fleet rightsizing important? In this guide to fleet rightsizing, we'll explore the key principles and strategies behind this essential fleet management practice. Whether you're managing a small fleet of vehicles or a large commercial fleet, this guide will provide you with the knowledge and tools you need to optimize your fleet for success.
What is Fleet Right-Sizing?: Definition & Key Aspects
The term “rightsizing” is used so frequently – interchangeably and often incorrectly – that fleet professionals may lose track of its true definition amid so much jargon.
As the U.S. Department of Energy states:
“Fleet rightsizing is a management practice that can help vehicle fleet managers build and maintain an ideal vehicle inventory. Fleet inventories often grow over time to include vehicles that are highly specialized, rarely used, or unsuitable for current applications. By evaluating fleet size and composition, managers can optimize vehicle use, conserve fuel, reduce emissions, and save money on fuel and maintenance.”
Four Key Aspects to a Properly Right-sized Fleet
Quantity
Your fleet carries the right quantity of vehicles, i.e., not too many and not too few. You have enough vehicles to satisfy the requirements of your organization’s mission and the vehicles are easily available to your drivers as needed.
Conversely, you do not have more vehicles than you actually require, which would create waste and areas of financial loss from unnecessary carrying costs derived from too much underused equipment.
Accessibility
Your most-needed vehicle classes are available where they are required, affordably accessible at the location where the work or the drivers are located. Seldom-used classes of vehicles (or vehicle types) are accessible at an easily traveled distance away, and are not needed at each fleet location, therefore it is unnecessary that every location has that vehicle type at the ready “just in case.”
Functionality
Having the right vehicle type/class for the work is crucial. A component of right-sizing is choosing the right class of vehicle and upfitting just enough of the vehicles to do the job. If you know the work your organization does, then you can look at your data and know what size and type of vehicle you need.
Obviously, you would not use a large box truck to transport one or two people, but organizations may buy oversized equipment on the pretense of what they “may” need someday, versus what they “will” need every day, creating waste and added costs.
When procuring a new asset, you should ask: Are the engines large enough to perform the recurring tasks but not oversized. Can the task be accomplished with a two-wheel drive vehicle instead of a 4-wheel drive vehicle?
Form follows function. Tap into your fleet management information system’s reporting to develop the clearest picture of what you actually do year-over-year and compose your fleet to serve your needs. You will find considerable reductions as well as savings from doing so.
Availability
Do drivers have access to vehicles when they are needed? Are vehicles available after hours or on weekends? If access to fleet vehicles requires access to a motor pool office or an outside rental office that is closed, needs go unfulfilled. Your drivers need access to vehicles at the time the job needs to be done.
The knee-jerk reaction to this aspect regularly is “we need more vehicles,” but that’s not true. You need more flexible availability. Systems like Agile Fleet’s key management, in partnership with FleetCommander, gives drivers the ability to make vehicle requests online, retrieve keys through an automated keybox, and have that availability around the clock, all year long, and even on holidays if need be.
That means the vehicles can do more in a day and it will not adversely impact staffing. Through analysis of your fleet’s data, you will find that rather than having three vehicles – one or two of which going unused in the parking lot most of the time – you get the full value from one vehicle without negatively impacting productivity.
How to Right Size Your Fleet
Do you want to rightsize your fleet operation? Rightsizing is a continuous initiative focused on ensuring you have the right quantity and the right class of vehicles available at the right locations - at the right time. What do you need to rightsize your fleet? Keep reading to learn more about how to rightsize your fleet.
- Find a project champion. A project champion is a fleet-focused person that can help drive your fleet management initiative throughout the organization. They are focused on fleet metrics. They understand how to analyze fleet utilization statistics and how to make vehicle count and composition changes based on the data. They also understand the many benefits of right-sizing, vehicle sharing, and the savings that can be achieved by doing so. They understand why sharing vehicles can be better for fleet drivers, and how to communicate that positive message throughout the organization. If you are reading this, it’s possible you are the type of person that could be your project champion, or you know someone who is.
- Track Metrics. Having metrics upon which to base your fleet count and composition changes is crucial to right-sizing. The end game is getting metrics that are objective, timely, show trends, and ultimately show what you are looking for. People come to us and ask, “how do I quantify our vehicle utilization and prove that vehicles are being used if I don’t have the data to back it up?” The answer is you probably have at least some data. Many fleets at a minimum have odometer and fuel burn data to start with. Having any metric is better than no metrics, and the key is getting started with a baseline number and adding benchmarks. (For more about how to measure utilization when you don’t have fleet management technology, check out this blog.)
- Create a fleet policy that supports right-sizing. If your policies support right-sizing, they keep your continuous effort going strong behind the scenes with little effort. One state government’s policy requires that the lowest-cost transportation always be used for official business. With an efficiently run motor pool in place, the state made it easy for their employees to access and use the most cost-effective vehicle to do their jobs. Their policy also dictates minimum fleet utilization thresholds for access to 1:1 assigned vehicles, prohibits personal use of official vehicles, strictly limits personal vehicle use for official business, and keeps tabs on driver’s license status. All these policies and much more support fleet right-sizing and should be used as the backbone of your initiative. And when policies are communicated and enforced via an automated system like FleetCommander, accountability is tracked and compliance is easy and consistent.
- Develop & Consult strong partners. It is important to leverage feedback from the people whom you are serving. Actively soliciting driver opinions throughout the process is important not only for continuous improvement but also to build confidence and get buy-in within your organization. Having partners such as reliable outside rental sources for unique vehicle requests (special vehicle classes or different locations) is also important. And of course, having a strong fleet technology vendor partner is vital to your right-sizing success as well.
- Find accessible, innovative fleet technology vendors. Having the right fleet management technology partner is an essential key to your right-sizing initiative. Here are a few questions to ask yourself about your vendor. Does your fleet technology partner invest in their client's success by dedicating resources and staff to it? Do they consistently offer educational opportunities such as webinars, articles, white papers, etc. to help advance the best practices of their clients? Are they respected within the fleet management industry and are they considered subject matter experts? Does your technology partner have employees answering your phone calls with a live person, or do they only offer video or knowledge base support? Has your technology partner deployed a solution within an organization that is similar to yours with references to share? Some of these nuances can mean the difference between a technology partner dedicated to your success and one that is simply selling a one-size-fits-all solution. Having the right fleet management technology partner can make the difference between a rightsizing project that soars and one that never gets off the ground at all.
