Understanding the true cost of downtime

Monday 9th September 2019

For any size of fleet, a certain amount of downtime is inevitable. After all, vehicles need to be serviced, maintained and inspected. They will also be involved in incidents and accidents from time to time.

However, when a vehicle is off the road unexpectedly, it is much more than inconvenient, it can cost your business up to £800 per day. What’s more, the impact of each event can often extend beyond the obvious cost of repairs, rescheduled jobs, temporary vehicle hire, emergency outsourcing of work and even fines for breaching customer Service Level Agreements (SLA). Unexpected downtime can mean letting your customer down at the last minute and, as a result, putting future business at risk.

The importance of measurement

Given the impact on financial profits and business reputation, accurately quantifying the effect downtime is currently having on your business is a critical first step.

Downtime is more than just the hours and minutes a vehicle is in the repair shop, it is every minute that vehicle is off the road. This includes ‘knock-on’ employee downtime, as a result of having no vehicle to drive, injuries and trauma that affect their ability to work, as well as time spent rescheduling jobs, arranging temporary staff and vehicles, dealing with repairers and liaising with insurance companies. Put all this together and downtime could be costing you a lot more than you think.

Having said this, many companies find it extremely difficult to achieve total visibility for every aspect of their fleet. And, without a complete picture, you could end up missing opportunities to increase efficiency or decrease costs. But difficult doesn’t mean impossible, it just means that you need to put the right technology in place and be able to extract the information in a way that guides good decision making. Get it right and the results may surprise you. For example, we have recently helped clients use our fleet management and business intelligence portal to first gain 100% visibility of all fleet assets and then go on to achieve record high fleet availability levels of up to 99.6%.

Rightsizing your fleet (and services)

When it comes to vehicle acquisition or renewal, many businesses simply replace vehicles with one of the same size or payload. The longer this goes on, the easier it is for specifications to become out of step with your current requirements. As a result, vehicles can end up being put under unnecessary strain, which risks more frequent breakdown.

It’s also worth remembering that sticking with the same selection criteria time after time could mean that vehicles are either too large, have equipment and features which don’t suit the current application, or include features which are simply unnecessary. Whilst this might not directly affect downtime, it could mean that your vehicle purchasing or leasing costs are much higher than they need to be.

Having the right number of vehicles is also important. With too few vehicles you may be unable to react to unplanned events or unexpected opportunities. On the other hand, operating too many vehicles could result in unnecessary expenditure. It’s a difficult balance to get right, and having timely access to temporary vehicles, with specifications matching your working requirements, is an essential part of managing downtime.

And it’s not only the vehicles which need rightsizing. Minimising downtime means that support services, including breakdown and recovery, as well as temporary vehicle supply, need to fit with your working schedules and job requirements. So, if you have a customer SLA which means that items need to be delivered or work carried out within a set period of time, your support service needs to match this requirement precisely.

Renew vehicles at the right time

Renewing your fleet regularly can also make a difference and could even improve your company’s image. As vehicles get older, breakdowns become more frequent and the cost of repair increases. And whilst it might be tempting to try and keep a vehicle going for as long as possible, the true cost of keeping it on the road could be more than leasing a newer model, which is likely to be more fuel efficient, more reliable and better suited to your current business requirements.

Intelligent SMR

Prevention is better, and often far cheaper, than a cure. In other words, a vehicle which is regularly serviced, well-maintained and repaired to a high standard, will be far less prone to unexpected downtime.

Of course, servicing a vehicle causes its own downtime but with a bit of planning you should be able to avoid, or at least make provision for, any disruption to normal operations. This could mean arranging for servicing and repairs to take place out of hours when the van isn’t needed, such as overnight or at weekends, or coordinating bookings so that more than one task can be completed in a single session. Taking advantage of mobile servicing units, or using a garage that has locations centred around your primary areas of operation, can also reduce the amount of time a vehicle is unavailable.

Another good idea is to check ahead that your chosen repairer has any parts which are likely to be needed already in stock before the vehicle goes in, thus avoiding any unnecessary delays or repeat bookings.

Real inspections, regularly carried out

Whilst you may already have a policy which states that drivers perform a walk-round check of their vehicle at the start of each day, does this actually happen every day, by every driver? Although it’s understandable that there is a job to get to, or a deadline to meet, performing regular checks helps spot problems and potential maintenance/safety issues early on, allowing for repairs to be arranged in good time. Doing so will avoid unscheduled downtime that will disrupt operations for far longer than the time it takes to do a daily check. And, as an added benefit, it also helps to encourage drivers to feel more responsible for the vehicle they are in charge of.

Good communication is another important aspect, ensuring that any issues identified are quickly and clearly communicated to the person or team who can take the necessary action. Modern technology can be a real boon here, with walk around apps providing real time reporting of damage and defects, alerting the relevant teams instantly via SMS or email to the problem. Some of these, such as the Vehicle Daily Check and Defect app operated by Hitachi Capital Vehicle Solutions, even track the movement of the driver/device around the vehicle, confirming that they have carried out a full physical check.

Proper driver training and monitoring

Poor driving can quickly wear out parts and tyres, as well as resulting in an increased number of accidents. Ensuring that drivers are properly trained for the vans and equipment they operate, including safe driving behaviours, can have a real impact on unwanted downtime. Even a good driver can usually improve, so regular refreshers can play an important role for anyone who drives on business.

Telematics systems, such as those provided by the RAC, now collect far more detailed info about driving behaviour than ever before, and can be extremely useful in helping to identify problematic driving styles and drivers in need of training to increase the efficiency of their vehicle and to reduce the likelihood of being involved in an accident. In fact, the RAC have found that telematics reduced wear and tear on their fleet by as much as 25%.

Speed limiters

Unpopular with some staff, these could be considered as another way, albeit a less responsive and targeted one than telematics, of protecting your fleet. Whilst journey time may be slightly increased, downtime as a result of over-taxed engines and brakes being thrashed will likely decrease, along with unwanted accident damage.

The importance of action

Downtime affects every business and every size of fleet. What you decide to do about it will ultimately depend on how business critical your vehicles are and whether you have access to the type of data that not only quantifies the impact, but also highlights how vehicle off road time, whether unscheduled or not, can be kept to an absolute minimum. So if this is something you need support with, why not get in touch?

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