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The top 10 risk management KPIs every fleet manager should be aware of

August 25, 2015 by Vernon Bonser

Barely a day passes without the issue of fleet risk hitting the headlines in some way. From lone worker Duty of Care to Corporate Manslaughter to the Working Time Directive, the fleet manager’s role can sometimes seem wrapped in risk management and legislative worry.

Technology has been quick to come to the aid of managing risk effectively, but the vast volumes of data now potentially available to fleet managers can be bewildering. As ever, knowledge is power not just data alone.

The topic was hotly debated by leading industry experts at a recent Fleet Data Insight event focused on the subject of using fleet data to manage risk. The experts concluded that there are a number of key datasets that underpin critical success factors for the reduction of fleet risk.

Here we share the top 10 Risk Management KPIs, as defined by the industry, for fleet managers.

For a more in-depth look at how to use fleet data to reduce risk, download the Fleet Data Insight guide for Risk Management here.

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1) Number and cost of insurance claims

Insurance data is an ideal place to start when attempting to weigh up the extent of the risk problem faced by a fleet operator. The cost of insurance claims is a useful monetary value for highlighting the scale of the problem, particularly when demonstrating the ROI of tackling fleet risk to senior management or budget holders. Delving further, incident figures will also provide useful insight into when and where most incidents occur.

Find out more tips from Andy Price at Zurich Insurance in this video.

Find out how highway reinstatement firm Ferns has used telematics to drive down insurance costs – read case study.

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2) Number of KSIs and incidents

The amount of incidents involving drivers and the number of drivers killed or seriously injured (KSI) are key sets of data. Each provides a good baseline for where an organisation stands in terms of its fleet risk. A steady decline in numbers will usually indicate that initiatives are having a positive effect.

Find out more about accident avoidance in this video example from Iron Mountain

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3) Incidents per 10,000 miles or per 1,000 drops

Clearly, the likelihood of incidents occurring is proportional to the amount of time a driver spends on the road. Therefore, to create a situation where different drivers are being assessed on equal terms, looking at the number of incidents in relation to the number of miles travelled or journeys completed might be more useful. But, of course, these figures must also be viewed in context possibly by grouping similar characteristics, as an employee who drives 10,000 miles around London will encounter different risks than one covering the same distance in the Scottish Highlands.

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4) VOR time

The time a vehicle spends off the road (VOR time) is crucial when attempting to quantify the impact of incidents in terms of business disruption. While off the road, working capacity may be reduced, causing a knock-on effect on profitability, customer service and the ability to satisfy KPIs. The amount of jobs completed in a day or work might also be taken into account as part of this.

Find out how Sainsburys highlight VOR time by working out the financial implications in this video.

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5) Total incident cost vs sales revenue

This figure provides an overall footprint for each incident. Building on the cost of insurance claims, it takes into account the total cost impact of an incident, including the cost of replacement vehicles, uninsured losses and business disruption.

To make the total incident cost figure more useful when attempting to tackle the performance of drivers, it might be viewed against sales revenue. This could be done on an entire fleet basis or on a departmental and individual basis – looking at how much specific employees or groups of employees contribute to the bottom line, compared to how much they cost in incidents – in order to justify the need for change.

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6) Maintenance cost per driver

Further to costs incurred as a result of the incidents themselves, ongoing maintenance costs can point to general issues with the way vehicles are being driven. By analysing these costs by driver, it makes it possible to benchmark the fleet and more easily identify where unnecessary costs are being incurred through poor driving practice or lack of care regarding the condition of the vehicle.

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7) Driver endorsement points

This top line figure offers an indication of how safely employees are driving, including factors such as speeding and driving without due care and attention or without reasonable consideration for other road users. Drilling down further than endorsement points, the actual number of incidences of speeding, which can be provided by a telematics system, will highlight whether there is an issue with staff driving too fast, who are the worst offenders and how seriously they are speeding.

Find out how to implement a road map to enable change amongst drivers in this interview with Mike Rayner of fleet management consultancy Turris UK.

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8) Number of driving events

Further to speeding, information on driving events – incidences of poor driving style, such as over-acceleration and harsh steering or braking – provided by telematics is extremely useful for improving driver behaviour.

Graham Hodgkins at Fife Council reveals how he improved safety by 26% by introducing a driver performance scheme – watch video.

Find out how the latest ‘predictive’ telematics technology can help your employees to drive safer and greener – watch video.

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9) Hours spent behind the wheel/breaks

Working time is already monitored by those vehicles fitted with a tachograph but should be a concern for all fleets. Daily and weekly working-time limits should be established in line with legislative and safety requirements and alerts set to warn both management and drivers when breaks are due to be taken.

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10) Servicing schedules

Ensuring vehicles are well maintained and serviced is one of the main requirements in holding an ‘O’ licence and fulfilling Duty of Care requirements. Detailed logs should be kept for all vehicles to ensure services are not missed and notifications can be set at the proper mileage or time intervals to act as a failsafe.

For a more in-depth look at how to use fleet data to reduce risk, download the Fleet Data Insight guide here.

Read our free risk guide: How to help your teams to drive safely.

Read our free risk guide: Guarantee the safety of staff while saving thousands.

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Tags: Courier services, Passenger transport, Service and maintenance, Transport

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