Utilization in a small fleet
Let’s talk utilization in a small fleet: take a look at your Utilization through a set of fresh eyes by simply asking yourself the question; “Is the asset working for me or against me?”
If a piece of equipment is not producing revenue or services then it is surely consuming revenue or services. Take this to task by gathering detailed information concerning the equipment’s duties and frequency of use, and then use the information to set triggers for evaluation.
Equipment rental should always be considered as an alternative to purchase or lease if the utilization is low. With the exception of emergency equipment such as fire trucks and snow plows, which we hope are never needed, all of the Town of Jonesborough’s equipment should be working hard if it expects to stay here. We certainly would not have an employee sitting around on the payroll just in case we need someone nor should we have a piece of equipment motionless while it consumes resources such as insurance, tire dry rot, rodent damage, seal degradation and certain major parts failure due to its inactivity. Get rid of them. Utilization data will help reduce size by identifying seldom used equipment. A reduced fleet size means more funds available to nurture the productive equipment in our care.
In a small fleet it is often difficult to put a hard number on utilization, simply calculating the miles/hours over time is not the full story. Technology partners such as fuel management software and GPS solutions are some of the best ways to assess equipments true utilization thus gaining insight on how often the equipment is used and not just how much. We may know piece of equipment is used 250 hours per year but there is no way to know if the asset is working 125 hours 2 times per year or it is getting used 5 hours per week and that makes a big difference in replacement strategy. Use utilization information in whatever form you can gather it but understand it is one of the main tools when recommending replacement or deletion so accuracy counts.
As newer equipment becomes available it is often advantageous to consider the technological life of equipment as a basis for replacement, the waning drift of asset utilization requires constant attention. Older equipment tends to sit around while the good stuff goes out the gate and this trend ultimately drives up the cost per mile/hour on underutilized equipment. In short; older equipment is often consuming resources at a higher rate than it is providing benefits and that is where I draw the line and recommend replacement or ideally delete the asset all together.
When I think about utilization in a small fleet I also think about how equipment diversity and proper equipment sizing can increase asset use overall. Be careful; the necessity for bigger and better is often exaggerated by the user to fulfill a sense of attainment. Minimizing a fleet’s equipment size to the point of productivity decline is also an issue to be considered, so there is a need to try not to polarize the issue. Remember: the happy medium is called that for a reason. Rightsizing and diversifying a fleet is certainly one of the best ways to achieve lasting fleet cost savings and ultimately customer satisfaction because they will more often have the “right tool for the job” on hand.
When the right tool is available utilization goes up and cost per mile/hour goes down.
