Redo Your Dashboards: The Best Fleet Management KPIs to Use in 2023
The economy is struggling and signs are pointing to a recession on the horizon. Markets, companies, and individuals that were once thought to be invincible could fall. The last few years have shown that businesses must pivot quickly when facing new challenges and develop greater operational resiliency if they are to survive and emerge stronger in 2023.
Trucking and logistics companies are preparing for 2023 by gaining more visibility of key operational and financial metrics. Having partial visibility makes running a business too risky, like driving at night with one headlight. Full visibility is needed to truly understand what’s coming at you or happening within.
Without definitive data that is easy to digest and respond to, employees on the front lines and in the c-suite will have questions that remain unanswered or draw incorrect conclusions. Either way, costly mistakes will be made during an economic downturn. Choosing the right key performance indicators (KPIs) is therefore critical.
Every business will have some metrics that are unique based on their current state and future plans. A number of metrics have universal appeal in the transportation industry for helping companies better navigate unpredictability. What you ultimately choose will start with 1) defining and communicating what key performance indicators (KPIs) are absolutely critical to your business and 2) what system capabilities you have to automate the reporting.
First, it’s important to choose and define KPIs that will help everyone in the organization work towards a common goal. KPIs cannot be unattainable or immeasurable; they need to be specific, achievable, and relevant—and the ‘why’ behind each KPI needs to be communicated to everyone. If you can’t answer the why, you probably don’t need to be tracking it.
The Network Effect
It’s common for fleets to track operating expenses on a “cost per mile” basis, but these metrics do not account for how back-office processes impact the profitability of each load. You could track the Cost Per Transaction (CPT) or Cost Per Load (CPL), for example, to get a better picture of your overall costs. Similarly, many trucking and logistics companies track operating margins for each load but don’t use KPIs that account for the network effect of profitability.
Metrics that account for time-based activities can reveal the bottom-line impact of productivity of drivers, customers and lanes. If you have loads that are being delayed at customer facilities or going through congested metro areas, those loads impact the profitability of current and future loads in the network. Consider adding metrics such as Revenue Per Hour and Revenue Per Total Hour to help identify and assess these issues.
How drivers plan and execute their trips makes a big difference as well. Fleets can look at drivers collectively and individually by using KPIs such as Miles Per Week and Driving Percentage versus On-Duty Percentage to gain insights into potential versus actual productivity.
Load planners are responsible for maximizing revenue and driver miles. Tracking the Revenue Per Total Planned Transit Time will help them make more profitable decisions. Likewise, customer service reps can track Revenue Per Hour to better navigate freight opportunities that will increase driver miles and company revenue from greater load velocity.
The KPIs you choose should always serve you and allow you to proactively manage the business by unearthing opportunities while safeguarding you from surprises.
Tracking and Measuring Critical KPIs with Magnus
Once you have selected and communicated your KPIs, it shouldn’t be a big lift or a strenuous process to actually track and measure them.
Magnus Technologies offers a SaaS-based transportation management system (TMS) with an all-inclusive subscription that includes our Business Intelligence (BI) module. The BI module helps trucking and logistics companies capitalize on data by giving people in all functional areas real-time KPIs and decision support tools.
The module integrates with the Magnus TMS and with other internal and external data sources to take data in, and cleanse, consolidate, and rationalize it so that organizational leaders gain a full-size picture of their business.
It also includes a robust suite of self-service reporting tools to empower strategic decisions by all users. All the data visualization tools, KPIs, drill-down reporting, and workflows in the suite are customized by user roles to help improve overall performance. Information can be shared with users by role to indicate what they can do, right now, to make the biggest impact towards achieving company goals.
Data from the TMS also can be exported to custom reporting tools such as Power BI or Tableau through an open API. It’s a platform that works with you and helps you achieve your goals.
No one can be sure of what lies ahead in 2023, but one thing is certain. As long as your company uses KPIs that matter most to your business and bottom line, and have a strategy in place to effectively track and measure those goals, you’ll be more resilient and better prepared to navigate the year to come.
Let’s connect to discuss which KPIs you want to track next year and how a modern TMS platform can support your needs.