12 Days of Fleet FYIs: What Are The Benefits of Right-Sizing Your Fleet?

Gretchen Reese (00:06):

Hey there, welcome to Fleet FYIs, the weekly podcast by Utilamarc that reveals how you can make the most of your data first for under Fleet Management. My name is Gretchen and every week you'll hear from me and some of the industires finest. In candid conversations that will shed some light on not only two decades worth of data insights, but some of the industires hottest talking points and key metric analysis with the aimed help, you'd better understand your Fleet from every angle. But before we begin, if this is the first time you've heard our show, thanks for stopping by. I'm so glad you decided to come along for the ride with us. 

(00:41):

But I've got a quick favor to ask you. Once you finish today's episode, if you could take a few minutes to leave us a review on your favorite podcasting platform, we would really appreciate it. Give us a rating, five stars I hope, (laughs) or tell us what you liked, or leave us a comment or a question about what you've heard in today's episode. But if we haven't yet covered a topic that you're interested in hearing more about, let us know. We would be happy to go over it in detail in a later episode. If that sounds good to you, let's get back to the show. 

(01:17):

Hello everyone, and welcome back to the Fleet FYIs Podcast. We are back again with 12 days of Fleet FYIs. And today we're moving into a Utilimarc tried and true favorite topic, what is that you may ask? Well, it's right-sizing, as I'm sure you could assume from the title of this show. And more specifically, today we're digging into what the benefits are when it comes to undertaking or right-sizing initiative for our Fleets today. Fleets are actively aiming to reduce costs, ask any Fleet Manager today, and the odds are, (laughs) they'll agree. 

(01:51):

And this could be for a variety of reasons, external, like economic fluctuation, especially like we've seen over the last couple years. Or potentially they could be internal, such as an interest to outsource or improve operations. So, Fleet growth and decline as always, is something to be expected as economies are always changing and there will able be ways to better optimize your Fleet. This we already know. The key here though is to understand the benefits of right-sizing your Fleet, and how in doing so, you'll be better equipped to deal with any factors that may affect your annual budget or your opperational strategy. Especially if it's a curve ball that ends up completely over in left field. 

(02:33):

So, if you're ready, let's dig in. So, what is right-sizing, I mean, truly? Well, according to the Alternative Fuels Data Center from the US Department of Energy, Fleet right-sizing is a management practice that can help vehicle Fleet Managers build and maintain sustainable fuel efficient Fleets. So, I guess the question that I could ask you is, do you want to lower your operations costs while still maximizing profitability? A bit of a rhetorical question because I hope you answered yes. (laughs) But still, if you didn't answer yes, then right-sizing could be your one-way ticket to actually doing so. 

(03:22):

When one speaks of right-sizing your Fleet, they're often talking about determining what the so-called correct size of your Fleet mix needs to be in order to fulfill your needs and your customers needs. Too many assets, it could cause a monetary, and less sustainable burden. Too little, and you guessed it, you could experience service or- shortages and unhappy customers. Which that's not good either, right? So baking a question of, why Fleets should right-size their assets, because we all know that the big, "Why" looms over our heads, (laughs) when it comes to undertaking any initiative. We all know that efficiency begins with the optimization of assets and costs, that's no secret at all.

(04:04):

Right-sizing efforts can assist all levels of management in creating an efficient Fleet. And when people refer to the right-sizing of Fleets, they're not just speaking to cost reduction, although that tends to be one of the focal points of an initiative such as this. Instead, it's moreso about creating the Fleet that's most cost-effective for your current and future needs. The whole thing about being sustainable... And this is where that sustainability aspect plays in, and again, I apologize for sounding like a broken record if you've been an avid listener of our show, which hopefully you all are. 

(04:37):

Uh, but sustainability is multi-faceted, right? It- and at it's core, and here's your resident word nerd speaking up for, uh, the- the- the- uh, blah, blah, blah, the thesaurus here. That is for whatever reason, a massive tongue twister for me today. Speaking up for the thesaurus here, sustainability at its core, really means to be able to have a- an organization that is able to beat the odds. It is future-proofed, you have longevity built in and you don't have to worry about whatever comes next because you're prepared to deal with it. Back to the right-sizing piece of this, right-sizing can allow for major cost-cutting measures to be put in place. 

(05:18):

From reducing maintenance costs to lowering that of fuel, can also be a huge driver for better Fleet sustainability, like I said. And a key piece of this, is that growing societal pressure is forcing Fleet managers to evaluate whether they need as many vehicles as they currently have. Or whether EV's or something that is in the alternative fuel department like CNG, LPG, LNG, Hydrogen, you name it, is the correct solution. Right-sizing can aid in removing unnecessary vehicles from your asset mix. It could actively reduce the emissions your Fleet is responsible for, and again, you have the cost saving initiative side of it. 

(05:54):

However, the core reason and I should say this, as to why right-sizing is an effective management strategy, the reason it's a focal point is capital reduction. We've touched on it a little bit but I want to get into it just a little bit more. When 40 to 50% of many Fleets budget goes simply to owning vehicles, and the standard cost to bucket trucks averaging between about let's say $150,000 to $300,000 US dollars and rising, there becomes a pretty clear return on investment entering the spotlight here. So, what I'm trying to say is, it makes sense that cost reduction is the focal point for right-sizing initiatives. But don't just take my word for it, the benefits are more than you'd originally think. 

(06:39):

And though these aren't the only benefits to right-sizing your Fleet, I've decided to round up six. Because six is a good number, it's actually my favorite number, so we can get straight stuck in. First up on the list, optimized vehicle usage. So, the more that Fleet managers are aware of how many vehicles they really need, they're able to more-effectively use the vehicles that they currently possess. For example, this means better return on investment per vehicle, and less upfront asset purchase costs. Second up, we have fuel conservation, kind of like I touched on a little bit earlier in the episode. 

(07:27):

Similarly, to the costs of fuel and maintenance, the right-sizing initiative that a Fleet can undergo, means that you're using as much fuel is as necessary. And you become more sustainable in the process, and also you can save a little bit of cash. I mean, who doesn't love that? On the same, I guess you could say, topic at hand, but really it's third up on my list is the reduction of emissions. Sustainability, like we've already said many times in this show and I will say it many times again in the future, sustainability is a hot topic and it's for good reason. Whether it's customer-driven or it's investors driven, or even if it's an interna project, sustainability matters. 

(08:10):

The reduction of emissions matters, being able to report on carbon emissions that your Fleet is out-putting or greenhouse gases, it all matters. And whether it's to your board members, your investors, your customers... Which fun fact for you, about 66% of customers say they're willing to pay more for product or service if it's from a sustainable brand or company. The thing is, is that we need to be able to prove- to protect the environment that we live in in order to keep it as fully functioning and usable for everyone around as possible. Now into the next piece of this, which is probably going to be most peoples favorite on the list, is capital budget savings. 

(08:52):

When most of your budget is tied up in the actual purchasing of vehicles, imagine how your budget could be redistributed if you were able to identify that you only need to purchase a certain amount of assets? Or only replace a certain number rather than guessing, especially if the number is fewer than you originally thought? Right-sizing initiative can give you just a little bit more wriggle room in your budget than you may have previously had. And it's exciting, because, especially if you have say for example, uh, two million dollars in capital that could be used elsewhere for whatever initiative you're looking to use it for. That can be a bit exciting, at least I think so. Now second to last, efficiency metrics are utilized. 

(09:34):

A utilized Fleet is an efficient Fleet right? Or at least that's what we like to say around here. (laughs) When you're able to leverage your telematics data, Fleet managers are also able to identify exactly what the downtime and availability each vehicle has. They can also see how many days each vehicle and Fleet assets is being used. And knowing these numbers can help management decide how many assets are truly needed for their Fleets. And if it's something along the lines of, "Ooh, we can pull this from a rental pool, or we can split this one piece of emission equipment across all of the regions that our Fleet operates," knowing that can help save you capital in the long run. And also, it means that your Fleet overall is much more efficiently utilized. 

(10:15):

And now last but not least, therye kind of fun, I mean, come on. Understanding everything about your Fleet from top to bottom, what assets you need, what assets you don't. And where you can save a little bit of money as well as going a bit green in the process, it's fun to do. And being data people over here, we love a lot of that stuff. I mean, that's what we work with every single day and we really enjoy it. So, I had to add, "It's fun," in there because every good list I think, ends with that. But I'm sure a lot of you are wondering the question of, "How often should you right-size? Because it sounds like this big daunting task, right? Well, right-sizing your Fleet is not a one and done tactic. 

(10:55):

And rather it's a facet of your Fleet management strategy that should be evaluated on a pretty frequent basis as the needs of your Fleet will change over your time. And also, the needs of your customers might change. So, as you s- add or s- subtract assets to your Fleet mix, or when you change your levels of staffing, each of those could be good times to consider reevaluating whether or not your Fleet is the right size. But you know, should it be done annually, every five years? Utility Fleet professional argues for every five, only if you're right-sizing your Fleet from an enterprise level. But what's that starting point, where is the baby steps here? 

(11:33):

Well, one way to evaluate your Fleet for right-sizing efforts is to speak to the people that are actually working on and in the vehicles. So, this is your maintenance technicians and your drivers. (laughs) The can be very knowledgeable (laughs) about the assets they work with. I mean, it makes sense, they work with them every day, especially on the topic of how they're being used to support the organization. Another way, like we like to tell people, is understanding your telematics data and your Fleet analytics. Fleet managers should understand the daily usage rate and the needs of vehicles and assets within their Fleet. And one question that we hear pretty often from upper level Fleet management is, "How are you optimizing your Fleet assets right now?" 

(12:14):

Well, when you focus on optimizing your Fleet mix for the right now, as well as looking into the future, you'll not only be able to keep your costs as low as possible, but you'll be able to future-proof your Fleet for pretty much anything that comes your way, including the curve ball that goes out to left field. But I wanna hear what you think. Have you or are you planning on undergoing a right-sizing initiative in the near future? What are your questions if you have any, I'd be more than happy to answer them. Or if I can't answer them, I will bring in someone from our analytics team to do so. Because they are total brainiacs and always love to hear questions about data, I can promise you that. 

(13:03):

Send me an email, carrier pigeons work too, tag me on LinkedIn or use the hashtag Utilimarc Fleet FYIs, you all know how to get a hold of me by now, or at least I hope you do. So, until tomorrow for day four of 12 days of Fleet FYIs, I'll be seeing you. Chow.