3 Ways Fleet Owners Can Use The 80/20 Principle To Increase Revenues, Reduce Downtime

The 80/20 Principle can help fleet owners gain control of their operations, increase revenues, and decrease downtime.

The various inequities in the world were never more visible than during COVID-19 or amidst the Russia-Ukraine conflict. But most of us probably don’t wonder why and how these inequities exist. Italian economist Vilfredo Pareto, who lived in the late 1800s though, noticed these inequities and observed that around 80% of the land in his home country was owned by 20% of the people.

Pareto’s observation was found to be applicable to business problems and came to be known as the 80/20 Principle of the Pareto Principle. Essentially, the 80/20 Principle states that 80% of the impact can be attributed to 20% of the causes. For fleets, this translates to how 80% of issues can be attributed to 20% of the reasons.

What does the 80/20 Principle mean for fleet maintenance?

Applied to fleet maintenance, the 80/20 rule means that 80% of equipment breakdowns are caused by 20% of the possible faults. Furthermore, an 80% reduction in your machine or vehicle operating costs can result from just 20% of your maintenance effort. This means not all maintenance tasks are equal. It also means big gains in machine reliability and cost saving are easy to achieve if you understand maintenance principles and their order of importance.

Why is the 80/20 Principle useful to fleet owners/ operators or managers?

Essentially, the Pareto Principle allows fleet owner-operators and managers to analyze their operations. It can assist fleet owners in identifying problem areas in their business. For example, if fleet owners devote 80% of their budgeted time and resources to preventive maintenance, they may only experience 20% of the time unexpected failures. Similarly, spending 20% more on replacement parts from the original equipment manufacturers could result in an 80% reduction in complications. The Pareto Principle allows fleet owners and managers to understand the impact of different operational aspects.

3 Applications of the 80/20 Principle fleet owners can use to improve operations

The 80/20 Principle or rule can be applied to various aspects of life and business in order to understand how actions or tasks lead to expected goals or impact. For businesses, it’s imperative to study which 20% of their tasks, budgets, and other aspects they need to focus on to get maximum results. For example, trucking companies can analyze their maintenance tasks and find out the most impactful long-term solutions to reduce problems like Downtime and dwell. Here are a few areas where trucking companies and fleet owners can apply the 80/20 Principle to improve business processes and increase revenues.

1. Improved Maintenance Scheduling

Fleet maintenance and Downtime is an inevitable aspects of fleet management. Trucking companies and fleet owners must keep their vehicles in top condition to function well. Using the 80/20 Principle, fleet owners can study the various tasks and prioritize maintenance for older vehicles, vehicles which need equipment replacements, new tires, or more. Essentially, not just going through standard maintenance procedures but also scheduling preventive maintenance is the way ahead for fleets that want to thrive. The 80/20 rule helps fleet managers and operators figure out what key tasks to focus on to ensure vehicles can be on the road in minimum time.

While predicting what equipment and which vehicles will need maintenance (even preventive) is not easy, fleets can now use tracking devices to check the health of vehicles. Simply assigning asset tags to important parts in a vehicle can help managers know when the vehicle is due for a preventive check-up. In fact, about 44% of all unscheduled equipment downtimes result from aging equipment, making it the leading cause of unscheduled Downtime. Unplanned downtimes cost an estimated $50 billion every year.

For a healthier fleet, owners can also turn to fleet maintenance solutions like Fleetpal. This simple software is designed to track and solve every maintenance issue for fleet managers and technicians.

2. Driver Performance Improvements

It’s well known that 80% of accidents, or disruptions, may be caused by 20% of the driver workforce. Accidents and mishaps may occur when drivers do not pay attention to their tasks. Whether it’s slacking off, driver negligence, or idling time, fleet owners need to know what their drivers are up to on the roads.

Using the 80/20 rule, fleet owners and managers can figure out how to prioritize and deal with driver disruptions. Understanding what tasks drivers need to perform and what tasks cause the most idling can help fleet owners mitigate slacking off. As a result, revenues may increase.

3. Predictive Maintenance Using Big Data Analytics

Using the 80/20 rule can help fleet owners understand what tasks they need to focus on in order to drive maximum impact. While preventive maintenance is preferred by many fleet owners and trucking companies, using big data to enable predictive maintenance can help fleet owners and operators gain an edge. Preventive maintenance is favored by 80% of maintenance personnel, according to a 2018 survey, but predictive maintenance helps fleets drive down greater operating costs.

Predictive maintenance can be carried out through big data analytics. By studying data gathered from various sources over a period of time, fleet owners can analyze results and gain insight into what might go wrong with their vehicles. This allows them to essentially predict maintenance tasks in advance, thus mitigating possible equipment failures.

But just 23% of fleets surveyed in a report said they actually used big data analytics to guide strategic decision-making meanwhile, with only another 15% planning to do so in the future. This is an ample missed opportunity for fleets to improve operations by using the rich data telematics provides. Telematics, or specific digital equipment connected to various software, can help fleet owners gain real-time visibility into their fleet operations. They can track exactly where their drivers are, and their time spent loading and unloading cargo, compliance issues, vehicle health, and more.

Fleet managers, owners, and trucking companies can use telematics to gain a bird’s eye view of their operations through these digital tools. Using Fleetpal, for instance, fleet owners can gain visibility into their costs spent on various maintenance tasks and understand what 20% of tasks result in an 80% impact in the form of increased revenues and reduced downtimes.

Using predictive maintenance, fleet owners and operators can anticipate possible operational or equipment failures, calculate possible Downtime and cost, and solve these issues in real-time. Further still, using the 80/20 Principle, fleet managers can prioritize which tasks require the most attention for maximum impact.

From visibility and analysis of budgets to clarity on operational challenges, the 80/20 rule helps fleet owners and operators increase the business impact by doubling down on 20% of the most rewarding tasks.

Once you’ve identified Pareto Principle examples in your maintenance operations, take steps to put your weight behind the beneficial side of the equation — whether that’s reducing problems or improving results.

Using Key Performance Indicators (KPIs) heavily is important in making the 80/20 Principle work for you. Using commercial vehicle maintenance software like Fleetpal, designed to replace paperwork orders and confusing spreadsheets with simple charts and analyses, gaining visibility into your KPIs can be seamless. This can also help you work out the 80/20 rule for your business. Learn more about Fleetpal and how it can help your company gain visibility, or contact us today to schedule a free consultation.

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