Utilisation is a unit of work measured by income units such as distance travelled or hours worked over time. For comparison or benchmarking purposes, the timeframe is usually a year.

Comparison with the annual budgeted distance or hours is a measure of over or under-utilisation.

Comparison with income units is a measure of productivity.

Why is measuring utilisation important?

Utilisation is an indicator of how hard the fleet is working.

Without a measure of utilisation an accurate assessment of the following management issues cannot be made:

• Is the item needed on a permanent or on an irregular basis and should the item be owned or just hired as needed?
• What are the annual servicing requirements?
• How much fuel and oil will be needed each year?
• What staff or external resources are required for servicing and repairs?
• What will be the annual tyre wear?
• When can major maintenance be programed?

If all of these fundamental questions can be accurately and readily answered then managing the plant and vehicle fleet will be a relatively clear and simple process.

How can calculating utilisation save costs?

Examples of utilisation

Often, we see low kilometres on an item of equipment and incorrectly assess it as low utilisation. An example of this in a local government context is when a truck is used to safely transport mowers and work crews to a park. The gardening equipment is offloaded from the truck and used to clean and maintain the park.

The combined income units and engine hours for all the items transported by the truck are taken into account when examining utilisation figures. If the budgeted utilisation for the truck is 5,000km and 1200 income units per annum, and this is being achieved, the utilisation of the truck in this example is high and not low.

In another example, when a truck is being used all day to carry gravel to a construction site, the expected kilometres would be much higher. The budgeted utilisation for this truck would be 30,000km and 1200 income units per annum and the truck would easily achieve this. This is also high utilisation.

An example of low utilisation would be a grader doing only 350 engine hours per annum, to which staff were allocating 1,400 income units. Comparing figures such as these to national benchmarks should trigger an investigation.

How is utilisation measured?

To provide audit data that will correctly indicate utilisation, you need :

• Kilometres of the vehicle carrying the mowers
• Income units of the vehicle carrying the mowers - these indicate how much rechargeable time was allocated to the vehicle during the day
• Engine hours of the mowers transported by the vehicle
• Income units of the mowers
• Maintenance records of all equipment involved in the function of maintaining the park.

By having this information available, a fleet manager can ensure that all his equipment is in fact working, and not being provided simply as a convenience.