Replacing a vehicle fleet is a significant investment that requires a careful decision-making process. Many companies decide to squeeze every bit of life from their fleet vehicles before even considering a replacement. That approach may sound cost-effective, but it’s not.
Older cars consume more fuel, have an elaborate maintenance requirement, and can break down at crucial times. The accumulated costs of dealing with all these issues are often higher than the overall cost of replacement through a comprehensive, data-driven strategy.
This blog take a brief look at why vehicle lifecycle management is important and how you can leverage modern data analytics to create an effective system for your fleet.
The importance of vehicle lifecycle management
An effective lifecycle management system will optimize your operations, improve your performance and save you from unwanted surprises at crucial times.
Most companies that drive their fleet vehicle until they are out of commission deal with unexpected business losses due to breakdowns. Similarly, your organization might not always have the budget to finance a new fleet at a moment’s notice. With a data-driven approach, you can plan ahead to ensure that the money is available when required. Some other major advantages of vehicle lifecycle management are:
1. Savings in fuel and repair costs
Replacing your vehicles at an appropriate time will reduce your overall fuel and repair costs. Increased fuel consumption is often the first indicator when something is wrong. Even with proper maintenance, you’ll notice that older cars consume more fuel and require more trips to the workshop. Both of these costs can accumulate and become more troublesome than its worth.
2. Reduced liability and better driver behaviour
The condition of your vehicles can have a great effect on your driver’s behaviour. It is human nature to take care of new objects and ensure that they are used properly. This reduces the number of incidents on the road due to careless driving.
3. Resale prices
You are unlikely to get a good price for a fleet of vehicles near the end of their operational lifespan. A comprehensive system can help you recognise the most appropriate time to sell your fleet vehicles and get the best price. You’ll also notice that the new owner will appreciate the record of your vehicle’s lifecycle and may pay a good price for it too.
Key parameters to monitor your fleet’s performance
The best part about data-driven approaches is that they take out guesswork and assumptions from the process. Leasing vehicles saves you from worrying about their overall performance and lifecycle. However, when you decide to buy, you’ll need to keep a close eye on your vehicle’s performance parameters.
Some of the most important parameters you can track to optimize your fleet’s performance and take time decisions are:
1. Cost per mile (CPM)
Apart from the initial cost of ownership, your fleet vehicles will require you to spend money on fuel, lubricants, filters, and other parts. CPM is a comprehensive metric that allows you to distribute all those associated costs on the total distance traveled.
In lifecycle maintenance, CPM holds an important position as it allows you to easily distinguish between profitable and non-profitable assets. Once a vehicle’s value no longer exceeds its investment, it’s time for you to start looking for a replacement. Doing so would keep your operations streamlined and allow you to get the maximum resale price for your used fleet vehicle.
2. Track vehicle age and mileage
Keeping tabs on the cost per mile is a data-intensive job that requires both processing capabilities and time. An easier method many fleet managers adopt is to simply select a threshold based on vehicle age and mileage. For instance, a fleet manager may decide to look for a replacement after the fleet vehicle becomes 5 years old or has traveled a certain distance.
3. Evaluate the total maintenance and repair costs
The aforementioned method of monitoring the performance based on vehicle age is easier but has a lot of weaknesses. Another popular method is to keep track of the total maintenance and repair costs. These costs can be for the entire lifecycle of the fleet vehicle or for a specific timeframe.
Leveraging data analytics for an optimized fleet lifecycle management plan
Tracking different numbers and parameters can become overwhelming for a large fleet. Luckily there are excellent tools that can help you track all the important factors you need for an excellent lifecycle management plan.
With a data-driven fleet management service like fleetyr, you can analyze and present all your data in an easy-to-understand format. That’s not all, the benefits of data analytics are not limited to lifecycle management and preventive maintenance only. The right approach can maximize your fleet’s productivity while reducing overall costs. To put it simply, it can revolutionize your operations.