How to Get Rightsizing ‘Right’ for Your Fleet

When it comes to rightsizing your fleet in the utility sector, traditional models fall short. Unlike package delivery fleets that can schedule around predictable peaks, utility fleets must maintain enough vehicles for unpredictable emergencies while also controlling costs.

“On a typical day in the utility sector, only about 60% of fleet vehicles leave the yard,” said Chris Shaffer, CEO of Utilimarc (www.utilimarc.com), a data and analytics platform that helps fleet managers optimize operations for utility and municipal fleets. “But there are these surge events that happen in the industry. You have to have enough equipment for these surge events so that they can do their primary job – energy restoration.”

This unique challenge requires a different approach to fleet rightsizing. Through careful data analysis and gradual implementation, utility fleet managers can typically reduce their fleet size by about 5% while maintaining emergency response capability, according to Shaffer. The key lies in understanding both daily utilization patterns and surge requirements.

“Fleet size significantly impacts your cost structure,” Shaffer said. “Even having 100 too many vehicles can substantially affect costs when considering future purchases and maintenance.”

Here are six key strategies that can help you find that sweet spot between having too many vehicles and compromising service reliability.

1. Track telematics data to determine actual vehicle use.
“Through telematics, we can figure out how often the vehicles are being used,” said Alec Henriksen, senior data analyst at Utilimarc. “The primary metric we look at is a ‘usage day.’ So, whether that vehicle hit a certain threshold is how we determine if it was used, which could be mileage or engine hours.”

Shaffer offered this example: “‘Usage day’ for a bucket truck might mean that it needs to leave the service center, have 5 miles of drive time or an hour of engine time on a job site.”

This metric helps distinguish between vehicles simply being moved around the yard and those actively engaged in work tasks, providing a more accurate picture of true fleet utilization.

2. Analyze vehicle class and application patterns.
Different vehicle classes provide distinct rightsizing opportunities. Per Henriksen, “While we generally see fewer recommendations to remove first-responder vehicles or larger buckets or diggers, we do see more recommendations to remove half-ton pickups, SUVs and vans.”

The vehicle’s application also affects rightsizing potential. “If you have a specialized single vehicle, you don’t need to use it much for it to be necessary to get the work done,” Henriksen said. “Whereas if you have 20 pickup trucks that all do the same thing, you’re probably not going to be using all 20 of them very often.”

3. Account for maintenance downtime in your rightsizing calculations.
“We need to figure out that downtime piece. And to do that, we look at open work orders on the asset,” Henriksen said. “If there’s an open work order on the asset, we consider it to be down for that day. This helps add in the availability of the asset to pair with the usage.”

4. Factor in seasonal variations.
“You’ve got all these emergencies, you’ve got all this seasonality, and then you’ve got mutual aid, where you send your equipment across the country,” Shaffer said.

For example, “Your supervisor vehicles might do a lot of work in March. And so you need those vehicles most often in that month,” Henriksen said. “But then you have unpredictable needs where there could be storm events in September or October like we saw last year when the hurricanes came around and all of the first responder-vehicles were deployed.”

How do you account for both predictable patterns and extreme events?

“We look at [fleet utilization] on a month-to-month basis, over the last 12 to 24 months, to determine how many of those assets are needed during those surge events,” Henriksen said.

5. Find the sweet spot.
Henriksen recommended a 95% coverage model, meaning you maintain enough vehicles to cover 95% of your fleet’s working days.

What does that mean for your rightsizing strategy? “Across the board, we typically see about 5% of assets recommended for removal, which creates significant capital savings,” Henriksen said.

6. Start conservatively and monitor continuously.
“Rightsizing is something you want to wade into slowly,” Shaffer said. “Be generous [on your usage-day calculations] to start with. You can always tighten them up later.”

Rather than making dramatic cuts, Shaffer recommended incorporating rightsizing into the annual vehicle replacement cycle: “Before we replace or give you a new truck, let’s see if you actually need a new truck. Maybe you already have too many in that class, and you don’t need a new one.”

Continuous monitoring is essential for long-term success. “Most of the fleets we’re working with look at a running 12 months in the sense that, every month, the 12-month numbers get updated,” Shaffer said. This approach helps build confidence in the process.

“Let’s get the user base bought in to start to trust the data,” he said, adding that fleets often fail when they “try to go too big too fast, and they get pushback.”

A conservative approach is important because of the consequences of getting it wrong. “You don’t want to make a mistake like removing a bunch of vehicles, and then you have some sort of surge event, and you can’t respond,” Shaffer said.

The Bottom Line
Rightsizing isn’t a set-it-and-forget-it program. It requires careful data analysis, gradual implementation and continuous monitoring so that you have the vehicles you need when you need them – without the cost of excess capacity.