See the Future Today: How Statistical Analysis Manages Hidden Cost Drivers

For almost as long as there have been fleets, companies have been challenged with uncovering the hidden costs that drive up expenses and drive down ROI. In recent years, innovations have been built on the foundation of modern telematics and Big Data has changed how companies approach managing their fleets through increased transparency. Companies are now able to target cost escalations and make data-driven decisions that lead to increased efficiency and more predictable budgets. But how does that really happen?

It all begins – not surprisingly – with data. You can’t manage what you don’t know. A crucial first step towards creating increased transparency is a robust telematics and data analytics program. This will provide insight into exactly how your fleet is performing in real-time and provide opportunities to dig deeper into areas where costs seem to be rising. Beyond just tracking a reporting on your fleet, you’ll be empowered to ask questions that have a real impact on your bottom line such as which exceptions are costing your organization the most money and which exceptions are keeping your fleet from reaching a specific business outcome. And, most important – you’ll be able to know why.

Current data analytics applications are introducing management through outliers – essentially, uncovering and addressing those vehicles within a fleet having the greatest impact on the year-over-year cost and reliability of a fleet. Together, this data helps companies monitor, maintain, and control costs to optimize fleet performance and prevent unexpected escalations.

Even more promising, however, are the ever-increasingly advanced statistical algorithms that are now being introduced into practice allowing companies to go beyond simple exceptions management and progress to advanced anomaly management. When you can look at data from a statistical perspective, you become empowered to begin predicting outcomes, which further increases your ability to control the bottom line.

When it comes to identifying the cost drivers of a fleet, answering easy questions like, “how many vehicles are in the shop?” or, “what vehicles are costing me the most?” are reactive. Today’s data predicts the cost drivers to create proactive questions like, “which vehicles should I replace?” and “which vehicles are likely to break down in the next month?”

Naturally we’re able to answer the easy questions, like which 10 vehicles may be costing an organization the most money. But we’re also able to create replacement cycles based on detailed data-driven analyses. Predicting costs in this way moves the needle further to reduce the highest cost drivers to your fleet. This means we can work with you to develop a plan that will keep all of your vehicles up and running, delivering the value you need for your organization.

At ARI, we have embraced this cutting-edge approach and integrate it with our countless years of expertise and knowledge, embedding it into our processes, procedures and models. This in turn we place at the fingertips of everyone in our organization so they can bring the collective knowledge of the entire organization and investment in innovation we have made to bear on behalf of our clients. We have found that by doing this we are able to partner with our clients and together develop a plan for where to take their organization five, 10, and 20 years down the road.