Fleet management is a critical aspect of many businesses, whether you’re running a delivery service, a transportation company, or maintaining a corporate vehicle fleet. And it all starts with one key question – how to calculate fleet size.
One of the vital decisions in effective fleet management is determining the optimal fleet size. Fleet rightsizing ensures that your company operates efficiently, keeping costs in check while meeting customer demands.
In this article, we will delve into the process, step by step. We’ll explain how to calculate fleet size and show you what you must consider to achieve optimal fleet size and utilization.
What is fleet rightsizing all about?
Optimizing your fleet size, often referred to as fleet rightsizing, goes beyond merely determining the number of vehicles required for the job.
It involves a comprehensive and forward-thinking approach that encompasses not only the quantity of vehicles but also their type, location, and availability precisely when needed.
In the realm of fleet management, the quest for the perfect fleet size isn’t always about downsizing. While some businesses may discover they have an excess of vehicles, leading to unnecessary expenditures, others may recognize the need to expand their fleet to fulfill customer demands and facilitate business growth.
Let’s look deeper into how to calculate fleet size for a better understanding.
How to calculate fleet size?
If you want to find out how to calculate fleet size, you must start from the basics.
This process requires thoroughly assessing your vehicle’s needs to meet operational demands while controlling costs.
Here’s a step-by-step guide on how to calculate fleet size:
Determine your operational needs
Begin by understanding your company’s operational requirements. Consider factors such as the volume of work, geographical coverage, and the nature of services you provide.
These factors will help you identify the core needs of your fleet.
Set utilization thresholds
Establish utilization thresholds for your vehicles. These vehicle utilization thresholds define the minimum acceptable utilization level for each vehicle in your fleet.
For example, you might set a threshold for mileage, hours of operation, or payload capacity.
Assess current fleet performance
Next, evaluate the performance of your existing fleet.
Gather data on each vehicle’s utilization, including mileage, hours of operation, payload capacity, and idle time. Use this data to determine which vehicles meet or exceed your utilization thresholds and which are falling short.
Identify overutilized and underutilized vehicles
To determine which vehicles in your fleet are overutilized and underutilized, you’ll need to categorize them based on their utilization levels.
For example, overutilized vehicles consistently operate above your established utilization thresholds. In this case, you’ll be noticing high utilization, which is usually a desirable and positive result.
At the same time, it may indicate a need to redistribute work or consider additional vehicles to balance the load.
On the other hand, underutilized vehicles operate below your utilization thresholds. These are the assets that may be costing you unnecessarily in maintenance, fuel, and other expenses.
Analyze peak demands
Analyze your historical data to identify peak demand periods.
Understanding when your fleet faces the highest demand allows you to ensure that you have the right number of vehicles available during those times.
Consider geographic factors
Take into account geographic factors such as the locations of your customers, distribution centers, or service areas.
The proximity of these points can influence the number of vehicles you need and can also dictate what types of assets your company needs.
Review vehicle types
This brings us to the next point.
Assess whether your current fleet includes the right types of vehicles to meet the diverse needs of your business.
Make sure you have the appropriate trucks or other types of fleet assets for various tasks and locations.
Factor in maintenance and downtime
Consider maintenance schedules and potential downtime when calculating fleet size.
Vehicles undergoing maintenance or repair are temporarily unavailable, so having backup vehicles can help minimize disruptions.
Perform a cost-benefit analysis
Calculate the costs associated with adding or removing vehicles from your fleet. This includes acquisition costs, operational expenses, and the potential revenue generated by meeting increased demand.
Don’t forget to compare these costs to the potential benefits to be able to make informed decisions.
By following these steps and regularly reviewing your fleet’s performance, you can calculate and maintain the optimal fleet size that maximizes efficiency, meets customer demands, and minimizes unnecessary costs.
How to achieve optimal fleet size and utilization?
All of the above leads to one conclusion. Achieving optimal fleet size and utilization is a dynamic process that involves careful planning and continuous improvement.
Here are some strategies to help you achieve this goal:
- Implement fleet management software – Invest in fleet management software with telematics integrations to collect real-time data on your vehicles’ performance. These tools provide valuable insights into vehicle utilization, maintenance needs, and driver behavior.
- Redistribute workload – Efficiently allocate work among your vehicles. This may involve adjusting routes, schedules, or customer assignments to maximize efficiency.
- Remove underutilized vehicles – Consider removing underutilized vehicles from your fleet to save on maintenance, fuel, and insurance costs. This can also help streamline operations.
- Expand your fleet strategically – If demand consistently exceeds your fleet’s capacity, consider expanding your fleet. However, do so strategically to ensure that the additional vehicles will be utilized efficiently and justify the investment.
Fleet rightsizing, or determining the optimal fleet size, is a critical aspect of efficient fleet management. By following a structured approach to calculate fleet size and implementing strategies for optimal utilization, businesses can strike a balance between meeting customer demands and controlling costs.
With Fleetpal, you can get access to all of the essential data for making the right decisions when it comes to how to calculate fleet size. Ready to take action? Get in touch with our team and let us show you how our fleet maintenance software can make a difference.