At Areté, Inc., we understand that efficient distribution is the backbone of a successful supply chain. Whether you’re managing a fleet of delivery vehicles, coordinating route sales, or optimizing labor productivity, having the right metrics in place is critical to driving performance and profitability for the value chain. In this first blog of a two part series, we’ll explore three key distribution measures focused on fleet and labor efficiency while providing actionable steps to improve them.
1. Fleet Utilization Rate
Definition:
Fleet Utilization Rate measures the percentage of time your vehicles are actively being used for deliveries or other productive activities.
Fleet Utilization Rate (%) = (Total Active Hours / Total Available Hours) * 100
- Total Active Hours: The time vehicles are actively in use (e.g., driving, loading, unloading).
- Total Available Hours: The total time vehicles are available for use (e.g., 24 hours per day, 7 days per week, minus scheduled maintenance or downtime).
Why It Matters:
This metric provides a more accurate view of how effectively your fleet is being utilized. It helps identify underused vehicles, inefficient scheduling, or excessive downtime, which can lead to unnecessary costs.
Action Plan:
- Monitor: Use telematics and fleet management software to track active hours and compare them to available hours in real-time.
- Respond: Optimize routes and schedules to maximize active hours. Consider implementing predictive maintenance to reduce unscheduled downtime and improve vehicle availability.
2. Cases Delivered per Labor Hour (CDLH)
Definition:
Cases Delivered per Labor Hour (CDLH) measures the efficiency of your delivery workforce by calculating the number of cases delivered per hour worked.
- Net Physical Cases Delivered: Total cases shipped from the facility minus cases returned from outbound shipments.
- Total Labor Hours Worked: Sum of all hours worked by employees assigned to delivery operations, including driving, loading, and unloading.
Why It Matters:
This metric provides a direct measure of how effectively your labor force is converting hours worked into delivered cases. A higher CDLH indicates greater efficiency, while a lower CDLH may suggest inefficiencies in processes, training, or resource allocation.
Action Plan:
- Monitor: Track CDLH daily or weekly using workforce management software. Compare performance across teams, routes, and facilities to identify best practices and areas for improvement.
- Respond:
- Optimize loading and unloading processes to reduce time spent at the facility.
- Invest in training programs to improve employee productivity and reduce errors.
- Use route optimization software to minimize travel time and maximize delivery efficiency.
3. Deliveries per Vehicle per Day (DPVD)
Definition:
Deliveries per Vehicle per Day (DPVD) measures the efficiency of your delivery fleet by calculating the average number of deliveries completed by each vehicle in a day.
- Total Deliveries: Total number of successful deliveries made during the period.
- Number of Vehicles: Total number of vehicles in the fleet used for deliveries.
- Number of Operating Days: Total number of days the fleet was operational during the period.
Why It Matters:
This metric provides a direct measure of how effectively your fleet is being utilized to complete deliveries. A higher DPVD indicates greater efficiency, while a lower DPVD may suggest inefficiencies in routing, vehicle capacity, or delivery scheduling.
Action Plan:
- Monitor: Track DPVD daily or weekly using fleet management software. Compare performance across different vehicles, routes, and drivers to identify best practices and areas for improvement.
- Respond:
- Optimize route planning to reduce travel time and increase the number of deliveries per vehicle.
- Consider investing in larger or more efficient vehicles for high-volume routes.
- Implement dynamic routing software to adjust schedules based on real-time demand and traffic conditions.
Summary
By focusing on these three key metrics of Fleet Utilization Rate, Cases Delivered per Labor Hour, and Deliveries per Vehicle per Day, you can identify inefficiencies in your fleet and labor operations, optimize resource allocation, and drive profitability.
In our next blog, Optimizing Sales and Delivery Performance with Key Metrics, we will review three additional distribution metrics of Sales per Route, Fleet Capacity Utilization and On-Time Delivery Rate.
