Freight

Published on July 2016 | Categories: Documents | Downloads: 75 | Comments: 0 | Views: 670
of 40
Download PDF   Embed   Report

Comments

Content

Performance Management for Efficient Road Freight Operations

Guide

Disclaimer: While the Department for Transport (DfT) has made every effort to ensure the information in this document is accurate, DfT does not guarantee the accuracy, completeness or usefulness of that information; and it cannot accept liability for any loss or damages of any kind resulting from reliance on the information or guidance this document contains.

Foreword
Freight Best Practice is funded by the Department for Transport and managed by AECOM Ltd to promote operational efficiency within freight operations in England. Freight Best Practice offers FREE essential information for the freight industry, covering topics such as saving fuel, developing skills, equipment and systems, operational efficiency and performance management. All FREE materials are available to download from www.businesslink.gov.uk/freightbestpractice or can be ordered through the Hotline on 0300 123 1250.

3

Contents
Foreword Performance Management for Efficient Road Freight Operations
Who Should Use this Guide? How Should this Guide Be Used? Structure of the Guide

3 6
7 7 7

What Is Performance Management?
What Should a Key Performance Indicator Be? Which KPIs Are Right for Me? Measuring Overall Performance Focusing on Key Components of Your Operation Summary

8
8 9 10 12 12

How Do You Go about Measuring Performance?
A Step-by-step Approach to Measuring Performance Selecting the KPIs Setting and Reviewing Targets Data Collection Reviewing and Evaluation Reporting and Feedback External Benchmarking Results

14
14 14 15 15 18 19 21 21

Improving Performance in Your Operation
Operational Efficiency

24
24

4

Telematics Efficient Fuel Management Improving Fuel Efficiency at Thorntons plc Refrigerated Vehicles Efficient People through Developing Skills

26 26 27 29 32

A Checklist for Measuring and Improving Performance

36

KPIs Used in the Freight Best Practice Fleet Performance Management Tool and Information Needed to Calculate them 37

5

Performance Management for Efficient Road Freight Operations
Your freight transport operation may appear to be running smoothly, but the reality is, if you don’t measure it, you can’t manage it. Freight transport operations are made up of equipment, systems and people. Understanding and monitoring the performance of each of these can be very challenging. This guide gives you, the decision-maker, an understanding of performance management concepts in freight operations, as well as advice on putting a performance management process in place. Along the way, we’ll give you some examples and ideas to try out which will put you in a position to know if you can improve the way in which you are currently measuring the performance of your operation. The main themes covered in this guide are:

• Key performance indicators (KPIs) -

performance is best measured on an on-going basis, and KPIs which use a small number of key measures in important operational areas provide a good way to do this and make decisions, while at the operational level they can be a day-to-day or week-to-week management tool

• Roles of management - for more senior managers, KPIs can be used to develop strategy, plan

• Measuring process - the process or system used to measure performance should be clear, accurate
and proportionate to the expected benefits

• Measuring tools - there are a wide range of systems, from simple paper records to comprehensive
computerised systems for data collection, that save time and effort

• Analysis of results - it is important to analyse the data correctly and make best use of the findings,
and to look out for the pitfalls that can occur during both data collection and analysis

• Benchmarking - as well as comparing your own drivers, vehicles and systems, benchmarking

your operation against the performance of other similar operations in the same or even a different industry may reveal areas for improvement

6

• Strategies to increase performance

once you have understood your current performance you can then develop a strategy to identify reasons for good and bad performance, introducing good practice methods used by good performers, and focusing training or investment specifically in the worst performing areas

Who Should Use this Guide?
This guide has been designed primarily for managers and decision-makers operating transport or distribution operations. Other members of staff may also find useful information within the guide to help them better understand their own roles and how they might help to contribute to improving efficiency.

How Should this Guide Be Used?
This guide should be used as a reference document, providing guidance on concepts relating to performance management in freight operations and introducing the types of key performance indicators that can be measured in an operation.

Structure of the Guide
• Chapter 2 looks at the benefits of
measuring performance, demonstrates the use of key performance indicators and shows KPIs relevant to different types of operation take for introducing performance measures can take to improve efficiency once you have measured current performance

• Chapter 3 discusses the process you can

• Chapter 4 identifies the practical steps you

7

What Is Performance Management?
If you want to make well-informed, tactical and strategic decisions about your operation, you will need to be able to accurately measure the resources you use to deliver your services. Only then can you identify areas for improvement and assess how effective any operational changes made have been. The starting point for any performance improvement programme should be to understand the current performance of your operation. This means collecting data on key aspects of your operation, and turning this information into specific measures that can help you to identify areas for improvement - for instance, how much it costs you to deliver products to your customers, how many miles your vehicles run empty or the number of late deliveries you make. These measures are known as key performance indicators, or KPIs. A KPI on its own will not tell you much. Individual measures and data need to be turned into information that can help you make decisions. This means setting a target, and measuring and monitoring KPIs over a period of time to see how you perform against this target. Weekly, monthly and annual reports allow you to monitor progress and see which areas need the greatest improvement. Producing graphs or charts will often be the best way of showing performance progress.

Costs Service

Measuring performance can allow you to strike the best balance between service and costs

What Should a Key Performance Indicator Be?
There are many different KPIs that can be used to measure performance in a freight transport operation and it can be difficult to know which ones might be right for you. This section is intended to explain the characteristics of useful KPIs that can be applied in various types of operation and by different people. However, there are a number of things you can consider beforehand in order to decide which ones may be right for you. A KPI should be relevant and it should also be SMART - Specific, Measurable, Achievable, Realistic and Timed.

Specific
KPIs should be specific, simple to use and easy to understand. Complicated statistics and formulae can lead to confusion and uncertainty about what is actually being measured in the first place. If KPIs are specific and kept simple, they can be easily communicated across the business and there is no need for staff to have an in-depth knowledge of the area being measured.

8

Measurable
KPIs can show changes in performance over time. For this to happen it is essential to compare like-with-like data. It is easy to fall into the trap of comparing two drivers on different routes for time utilisation or miles per gallon (MPG). If one route is more demanding than the other, this could be misleading. Similarly, comparing drivers when they drive vehicles of substantially different age or vehicle type can also be deceptive. There are ways you can get around these problems however, such as rotating drivers onto different vehicles and different routes and then monitoring both driver and vehicle performance, to spot consistently high and poor performers.

Timed
The frequency of monitoring is an important consideration. Weekly or monthly monitoring is recommended for many KPIs but this can depend on the measure and the needs of a particular business. Some information may have to be collected on a daily basis, such as staff absences in the warehouse, daily delivery drops or nightly trunking volume. If certain measures are not recorded and presented to the agreed timescales, the risk of changes in performance going unnoticed rises.

Achievable
Any targets that are set should be achievable. It may seem beneficial to set high targets in the hope that this leads to greater improvements in performance, but people can become disillusioned when they continually fall short of the targets set for them. Regularly reviewing performance towards targets and then resetting the targets to encourage smaller incremental (but cumulative) improvements may work much better in the long run.

Which KPIs Are Right for Me?
The size, type and management structure of a company is likely to influence the range and type of KPIs you might use. KPIs can be used to help managers develop strategy, plan and make decisions, while at the operational level they can show clearly the areas that need improvement, or a change in approach. The inner two rings on Figure 1 show the strategic functions of performance and a number of key business areas that can all be monitored using KPIs. An individual KPI can tell you how well you are performing at an operational level, however, when looked at in combination with other measures, a picture can be provided of how you are performing in terms of revenue and profitability and overall fleet efficiency, and in relation to customer service and legal obligations. The outer ring and white text on Figure 1, opposite, shows a range of different KPI’s and the data required to help you monitor performance in a range of important operational areas. Appendix 1, on page 27, shows a list of KPIs commonly used in transport operations and the data required to calculate them.

Realistic
Remember that decisions and management actions will be taken as a result of the data collected and presented, so the data collection method needs to be realistic, reliable and consistent. It is important that the data required to produce the particular KPI can be collected easily and on a regular basis, as comparison over time forms the basis of benchmarking and then improving performance.

9

Figure 1 Key Performance Wheel

The Freight Best Practice Programme offers an easy to use Microsoft Excel© spreadsheet tool called the Fleet Performance Management Tool which allows you to measure 22 different KPIs.

Measuring Overall Performance
A director or senior manager within a company is likely to be most interested in overall performance and bottom-line financial results. For transport or warehouse operations, these

could be measured by the following KPIs:

• Overall cost of deliveries, such as cost per
case / pallet

• Cost of maintenance • Total cost of warehouse operation
10

See the Freight Best Practice Key Performance Indicators for: - Next Day Parcel Delivery Sector - Builders’ Merchants - Non-Food Distrubution - The Food Supply Chain - The Pallet Sector A full list of the Free Freight Best Practice publications can be obtained from the Hotline 0300 123 1250 or by visiting the website at www.businesslink.gov.uk/ freightbestpractice

Customer service KPIs are also important because they can give you an idea about how your operation is perceived by the people that ultimately pay you. Important customer service KPIs could include the:

• Percentage of deliveries on time • Number of customer complaints
The following case study below illustrates strategic KPIs used by Premdor. Changing service levels can, of course, have a direct impact on sales and ultimately profit as improvements in service levels can result in increased costs. Careful performance monitoring in these areas is therefore crucial to help strike the right balance.

Strategic KPIs at Premdor Ltd

Customer Service: Number of failed deliveries due to:

• Not loaded • Damaged • Driver out of time • Product not required • Delivery point problem
Sales/Order Process: Premdor measures the effectiveness of its own sales force. The costs per unit and per drop data collected by Ryder link into sales KPIs, and the ‘product not required’ delivery failure reason is related back to performance measurement, assessing the effectiveness of the order process. Benefits: The benefits to Premdor have been increased service levels and better value for money from the contract. Ryder contract manager, Mark Saville, said the benefits for Ryder were that, “KPIs allow us to manage the business and measure our performance and associated costs month on month and year on year. KPIs help us forecast resource due to the semi seasonality of the business. We strive to constantly improve on past performance and when we do we demonstrate this to Premdor.”

Ryder Plc is a major third-party logistics solutions provider which provides a dedicated distribution operation for Premdor, one of the largest suppliers of joinery products in the world. Each month, Premdor requires Ryder to produce a set of KPIs covering the following areas: Transport Costs:

• Total cost per trip • Total cost per drop • Total cost per unit • Miles per gallon

11

Focusing on Key Components of Your Operation
At an operational level, KPIs can give you a better idea of how drivers, fleets or depots might be performing. This information can help you compare the effectiveness of the managers at all levels in your business. Where some parts of an operation are consistently performing better than others, it may be possible to use KPIs to understand why this is the case and point to how to improve performance where necessary. KPIs for transport operations can be split into 5 main areas (costs, operational, service, compliance and maintenance), all of which could be presented by vehicle, part of fleet or company wide.

Compliance
Achieving high standards of compliance is a prerequisite to operating an efficient vehicle fleet with measures such as number of overloads, vehicle traffic infringements and number of accidents.

Maintenance
Maintenance performance is also important, and the fleet maintenance manager might want to look at defect report completion and rectification, tyre wear and replacement rates, volume of breakdowns and MOT pass rates.

Summary
Measuring performance can take time, but is well worth the time spent if it drives efficiency gains and improves operational performance. The starting point for any performance measurement system is to understand your current operational performance, and where the strengths and the weaknesses lie. This can be done by collecting data relating to daily operations and costs. Reports and presentation of weekly and monthly data in the form of graphs can help to highlight areas for improvement. Try to identify relevant KPIs covering different areas of your operation. Use KPIs to measure your overall performance as an organisation as well as the performance of individual parts of your operation. Regardless of which KPIs you choose, they should always be specific, measurable, achievable and realistic, while being monitored on a regular and consistent basis.

Costs
It can be useful to understand how overall business revenues or business volumes change but also how revenue from different parts of your business fair relative to one another. Measures under this area could be average cost per unit delivered or average driver costs per kilometre.

Operational
Fuel represents around 30% of costs in the majority of transport operations. Measuring and monitoring fuel consumption is vital, as well as average miles per gallon, average vehicle fill and average time utilisation may be measured. Planning efficiency could be measured by vehicle fill, driver utilisation, levels of empty running and kilometres per drop.

Service
Knowing how operational performance impacts on customer service can dramatically influence your actions, measures can include number of late deliveries, percentage of product damage and the number of customer complaints.

12

Operational KPIs at Premdor Ltd

Driver Utilisation: Comparing each driver with the scheduled time for the route. Driver Performance: Individual drivers can be compared to show how efficiently they drive the vehicle in terms of mpg and how safe they are by measuring accident and collision rates. Vehicle Utilisation: Evaluating the planning function by monitoring how well vehicles are utilised in terms of time and vehicle fill.

In this Premdor example, the management KPIs go to a greater level of detail than the strategic KPIs, which the Ryder team produces for Premdor. At the management level, Ryder is evaluating its driver and vehicle performances in order to improve the overall transport statistics that will form the basis of the strategic KPIs going to Premdor’s management each month.

Vehicle Performance: At this level, data is collected for each vehicle in terms of MPG and maintenance required. Customer Service: The number of failed and late deliveries can be measured for each route, along with order errors. It is then possible to see whether there is an issue with certain customers, or drivers on particular routes.

13

How Do You Go about Measuring Performance?
Changing an aspiration to measure performance into a system that works in practice needs a well planned and consistent approach, supported by people across your organisation. Once again, the size and nature of the business and distribution operation will affect the way in which the plans are implemented.

A Step-by-step Approach to Measuring Performance
Figure 2 opposite shows a basic outline of a step-by-step measuring performance process. Each stage of the process is then further explained in this chapter.

Selecting the KPIs
Chapter 2 describes the sort of KPIs that you might choose depending on the size and nature of your business or area of responsibility. You may already have to produce a range of performance indicators for your company as a part of established procedures. However, it is useful to review the KPIs you currently use. Are they specific, measurable, achievable and realistic and do they give you the information you need? There may be other KPIs that can better measure what you need to know. Think about what you want to know and then look at ways of measuring it. Take the example of an own-account company that requires a transport manager to account for overall fuel spend. In order to meet the fuel-spend target, the transport manager may decide to monitor fuel price, fleet mileage and fuel consumption by vehicle. Armed with detailed information, effective targets can be set and action taken to improve overall fuel efficiency. Staff who are the subject of your KPIs need to see real value in monitoring performance levels. If they are part of the recording process and the burden of information collection interferes with the activity that is being measured, they are likely to lose sight of the all-important wider operation.

14

See the Freight Best Practice publication Fleet Performance Management Tool for a full range of KPI spreadsheets. Figure 2 The Process of Selecting and Measuring KPIs

Setting and Reviewing Targets
Target setting is perhaps the most important part of measuring performance. You cannot set targets until you have measured current performance, but until you have reviewed performance against targets you cannot know what action is necessary to improve performance. Once you understand your current performance, setting realistic targets for each KPI is the next logical step. KPI targets should be in line with the strategic goals of your business and should aim to move the company towards achieving those goals. Targets do not need to be perfect; the very act of setting a target and monitoring your progress towards achieving it is really the important process. Always remember that monitoring and reviewing is an on-going process and if the target was met very easily, you need to go back and consider ‘raising the bar’. If you fall well short of the target, you should try to understand why this might have occurred and adjust your future target levels accordingly.

Select KPIs

Set and Review Targets

Data Collection

Review/Evaluation (Including Benchmarking)

Reporting & Feedback

Results Targets met? No

Yes

Tip
Targets are often discussed and reviewed on a monthly basis. Any longer period than this can mean that targets lose their relevancy.

Targets too high? No

Yes

Data Collection
Collecting data to determine your KPIs is often the most difficult and expensive part of measuring performance. Few companies will start from scratch so reviewing your existing process provides the first logical step. The data can be collected manually or automatically using some form of system, and they can be analysed within the company or outsourced.

Identify Strategy for Performance Improvement

Take Action Implement Strategy

A fuel management system is an integral part of gathering data which can be used to measure KPIs

15

A simple system with as few recording methods as possible is the safest starting point, as the more complex the methods you use, the higher the possibility that there will be errors. If you are reviewing and improving your performance monitoring, you may well find that information is being collected but is not fully analysed or utilised. It makes sense to view the performance management process in the same way as the fleet efficiency you are trying to measure: try to achieve the greatest output with the minimum of input.

Specific Data Collection Systems
It is possible that your company does not have any existing systems that could be used for data collection purposes. In this case, you might decide to buy a system with the main purpose of measuring performance. If you decide to do this, then make sure that the system is fit for purpose and offers value for money.

Integrating Existing IT Systems
A company may already have systems that can provide some of the information, but is not able to get the most benefit because of existing systems not communicating with each other or not reporting in a way that allows comparisons to be made. There are a number of IT suppliers that focus on bespoke systems which can link warehouse management systems to scheduling systems or to order systems, so that a far more effective flow of information can take place. The cheapest approach to improving a current situation is to ensure that you have fully exploited the information available from current systems. You may find that you can collect data and report on many of your selected KPIs.

Manual Paper-based Data Collection
Forms can be created so that data can be collected by drivers through filling in a daily driver sheet, collecting data on kilometres run and the number of cases delivered and whether the delivery was on time. The driver would also note down the amount of fuel put into the vehicle to fill up the tank at the end of the day. When the drivers return to the depot, they hand the sheets to an administration clerk who can capture the information into a computer spreadsheet.

Real-time Data Collection
Some operations may have specialised systems that can be used for the purpose of performance management, for instance, parcel carriers or service-orientated businesses such as utilities companies sometimes use hand-held terminals, enabling the driver to key in details of drops completed at the time. These systems can then be used to report detailed and accurate real-time data.

Automated Data Collection
Many companies already have systems in place, such as warehouse management and route scheduling systems, that can do the hard work of collecting the data, which can then often be presented in standardised daily, weekly or monthly reports that will already be able to provide useful information on your chosen KPIs. However, it is often the case that the reporting functions of these systems are not utilised.

See the Freight Best Practice Guides on Telematics and Information Technology for Efficient Road Freight Operations

16

Data Collection Errors
Whether you already collect KPI information, intend to make better use of existing data collection systems or wish to put in place a new data collection system,

there will always be the opportunities for data collection errors to lead to incorrect performance information. Problems can result from human, machine or system error. Often, time pressures can be the cause of data entry errors. A conscious check on data collected is recommended, whereby any unusual figures can be checked for reliability. It is also advisable to periodically monitor the accuracy of the data entry to spot any errors. It is important, therefore, when evaluating the results of data collection, to consider error as one potential reason for recorded changes in performance.

Tip
Good housekeeping, strong procedures and a dedication to precision can help to reduce the problem of errors in data collection.

Human error at point of delivery can cause problems when invoicing the customer.

The Perils of Averaging An Example of Errors in Data Processing
By averaging MPG rather than using raw data, Company X thought that its performance was better than it actually was. The following example of averaging the performance of six vehicles over a week demonstrates the problem:
Vehicle Number 1 2 3 4 5 6 Distance Travelled 742 626 1746 1463 1562 2050 Gallons of Fuel Used 73.2 57.6 222.4 173.5 210 265.1 Miles Per Gallon 10.14 10.87 7.85 8.43 7.44 7.73

Total over the six vehicles over the week = 8,189 miles and 1,001.8 gallons Simply averaging the individual vehicle weekly MPG figures gives a result of 8.74 MPG (52.46÷6). However, as each vehicle has run different mileages, the true fleet MPG is revealed by totalling all mileage and dividing by all fuel used. This reveals that the actual fleet performance is 8.17 MPG (8,189÷1,001.8) - a difference of 0.57 MPG or 7%.

17

Reviewing and Evaluation
The performance review period can take the form of weekly, monthly and yearly comparisons. If your business has a number of comparable operations then benchmarking vehicles, shifts or depots can reveal areas where performance could be increased. For example, different vehicle categories within a fleet can be benchmarked against one another to show how they perform on fuel consumption. If two similar vehicles on similar routes undertaking similar activities have noticeably different fuel consumption performance levels, then this should suggest further investigation to review both vehicle maintenance and driver performance.

When comparing one part of your operation with another, it is important to avoid the common pitfalls of not matching like for like, leading to misleading conclusions:

• KPIs measuring the performance of

different parts of a delivery fleet by shift should take into account where shifts are not rotated and are constant nightshifts or dayshifts - there may be efficiencies gained by virtue of the time of day when the vehicles run on the road, i.e. encountering less traffic at night for fuel efficiency, it is possible that the results show the larger vehicles to be more fuel efficient. However, it is also likely that these vehicles may have been run on longer distance trunking routes rather than smaller vehicles that may have been used for numerous urban multi-drop deliveries the type of operation could be significantly different. So, for example, a transport operation could be primarily a trunking or single-drop operation, while another could involve multi-drop deliveries in urban areas. The type of product carried may differ, and in both the warehousing and transport operations it could be that certain products require a much longer loading and unloading time owing to the size or complexity of the product mergers take place there is a difference in the quality and age of equipment and, until the equipment is replaced, there could well be a marked difference between the resources available at each location

• When benchmarking vehicle categories

See the Freight Best Practice Fuel Management Guide which looks at vehicle versus vehicle and driver versus driver performance monitoring in more detail

• When it comes to benchmarking depots,

In the Parcel Sector Benchmarking survey undertaken in 2005 a number of leading companies submitted data for three depots each representing different geographical regions of the country (North, Midlands and South). One company’s Midlands depot was the best at collecting parcels and bringing them into the regional depot, having 36% cubic fill at the end of the journey, whereas the same company’s London depot had the poorest performance with only 17% cubic fill. Where there are significant differences in performance, an understanding of the reasons for this can help the business improve efficiency. This might be through looking for opportunities for back-loading, expanding the customer base and improved route scheduling

• Sometimes when company takeovers or

See the Freight Best Practice Key Performance Indicators for the Next-day Parcel Delivery Sector benchmarking guide.

18

In the Parcel Sector Benchmarking survey there was the tendency for all London depots to have poorer fuel consumption figures, perhaps because of congestion and lower inter-drop distance. On average, across all participating fleets, 18 tonne rigids had fuel consumption of 3.92 km per litre in the north and 2.56 km per litre in the south. It would be misleading to compare these performances directly because of geographical and operational differences.

This has the added value of automatically building-in previous months’ data into the report. The reports can be designed to show actual figures against targets set for each of the KPIs, and from these reports, automated charts can be produced. Often a quick view of a chart can highlight the problem areas within an operation far more clearly than tables of data. The value of KPIs can be converted into efficiency improvements only if they actually lead to changes in the behaviour of the people in your business. As a rule, feedback should be given to people at all levels of the business, from strategic to front-line operations - this ensures that all staff members are aware of progress and can see the benefits of performance measurement. In many cases, automated systems will effectively prescribe the reporting style and it will be up to you to take the available reports and tailor the information, either for your own use, for communicating with those staff whose performance you are trying to influence, i.e. drivers, or reporting to more senior staff.

For further details see the Freight Best Practice Benchmarking Guides Key Performance Indicators for:

• The Food Supply Cahin • Non-food Retail Distribution • Builders’ Merchants Sector • The Next Day Parcel Delivery Sector • The Pallet Sector

Tip

Reporting and Feedback
The way you report performance information can make a great difference to the success of a performance management programme. This means choosing an appropriate style and format that interprets the data as well as reports. It will be influenced greatly by the intended audience - more senior managers will usually want to deal with concise summarised information. At operational levels within a business, a more indepth analysis showing a wider number of KPIs may be necessary. The reporting system must reflect this difference. Reports can be set up in spreadsheet databases to read directly from input pages (see figure 3, taken from the Fleet Performance Management Tool), thereby speeding up the time spent producing reports.

Clarity and comparison are important. Remember that a picture (in the form of a graph) can portray a thousand words.

19

Figure 3 KPI Cumulative Summary List (Actual v Target)

Figure 4 Pallet Sector Benchmarking Example

External Benchmarking
Testing the performance of your own operation against that of others is widely recognised as offering excellent ‘health checks’, by comparing operational efficiency with that of the average and indeed best in class.

One example of this has been in the pallet sector (see figure 4), where a Pallet Network Benchmarking Survey measured a range of KPIs, including degree of vehicle fill, deviations from schedule and percentage of on-time deliveries. Participation in benchmarking with external organisations can be difficult to arrange and

20

time consuming to complete. Depending on the nature of your business there may be a benchmarking opportunity available. This is most likely to be the case within the public sector, for instance, within NHS Logistics or between local authority vehicle fleets. Freight Best Practice has also carried out a number of time limited surveys whose results are available for you to compare your current operational performance. Freight Best Practice would like to hear from any companies that would like to undertake this type of benchmarking. If you are interested, simply email [email protected]

Identify Strategy and Take Action

• Look at reasons for good and bad

performance at individual staff member, vehicle, shift or location levels set clear targets

• Report back to those underperforming and • Introduce good practice methods,

disseminated from high performers to the lower performers fill skills gaps

External Benchmarking
External benchmarking typically involves:

• Consider providing appropriate training to
Targets Set too High?
It could be that the target has been set too high and that it actually de-motivates individuals, thus people feel they would never be able to meet the target and less effort may be applied than if there were no targets at all. In this case, the target should be reviewed and set at an achievable level.

• Judging the relative performance of your
operation over time other practitioners performance

• Comparing aspects of performance with • Identifying areas for improvement in • Seeking the best approach to bring about
improvements in performance to match or exceed best in class

Tip
Always try to set achievable targets.

Targets Achieved
See the Freight Best Practice Key Performance Indicators for the Pallet Sector Benchmarking Guide. It is important that you acknowledge good performance, and that the factors that have come together to produce the higher performance level are recognised. A particular manager or individual can have made a meaningful difference and this should be recognised.

Results
Failure to Meet Targets
Where targets are not being met by individuals, depots or by the business as a whole, but it is known that other individuals, groups or businesses have achieved better performance, detailed KPIs can show exactly in which areas performance has fallen below expectations. This information will be vital in determining actions for performance improvement.

Tip
Share good practice across other operations in the same company.

21

Targets Set too Low
If targets have been met easily it may be that they have been set too low, therefore they should be altered. This is where benchmarking against competitors in the marketplace can provide companies with common standards.

Key Points to Remember when Introducing Performance Management into Your Organisation

• Relying on people to provide good

Internal Multi-contract Benchmarking Example
In Ryder plc’s Dedicated Contract Carriage division, benchmarking between different contracts takes place. This is a good way of comparing performance and management styles of different operations. It is made possible by having full access to all the data available, unlike comparisons with competitors’ operations. Concerns felt by companies outsourcing their distribution to Ryder over sharing of operational data are addressed through the non-disclosure of financial information and the contracts being in different industry sectors. Each operation benefits by becoming more efficient through using the best practice from one operation and transferring it to another. Each month a number of areas are benchmarked:

information can cause difficulties, so data collection systems need to be easy to understand and staff should be well briefed if you need them to collect data for you information you need to collect and how it should be collected management is critical - you cannot expect people throughout your business to give you good information if people at the top do not consider it to be important While continuous performance monitoring is best, taking regular snapshots over time can work well too. It is worth continually asking the question, ‘How will this data help me measure performance?’ information, make your own. Simple Microsoft Excel© sheets can be useful. The Small Fleet Performance Management Tool shows how, by combining a number of spreadsheets, a comprehensive performance measuring tool can be produced

• Work with staff to decide on what

• Getting support from company

• Collecting data can be resource-intensive.

• If no system is available for collecting

• Accident damage (average cost per vehicle) • Vehicle downtime (average days per
vehicle)

• MPG - comparison of each vehicle type • (3.5-tonne, 7.5-tonne, 18-tonne, tractor
units)

• Goods in transit • Sickness record • Collision frequency rate

See the Freight Best Practice publication Fleet Performance Management Tool which provides a full range of KPI spreadsheets

Understanding the Factors that Influence Performance
Many factors affect performance; many may be directly under your control, however, others may not be. Understanding and accounting for the influence of these factors is a necessary part of gauging the success of your actions targeted at improving performance.

22

When drivers leave the premises they are largely their own boss. Gaining their buy in to performance management is essential to your success

• Technical issues - if you are measuring the
performance of a new piece of equipment during a trial period, make sure you have support from the equipment or system supplier to ensure that you can make the most of the equipment

• Understand your current costs - you will

need to know your current costs to create a benchmark from which you can monitor progress

• Weather - to understand the effects of

• Realistic timescale - the longer the period
of measurement, the more informative the results will be to take into account seasonality and other external factors when comparing ‘before’ and ‘after’ results

weather on fleet performance it is best to carry out your trial over a 12-month period

• Flexibility for unforeseen circumstances

• Representative sample - always remember

- a degree of flexibility in the trial procedure is essential to incorporate any unforeseen factors

• Ownership of intervention - from the

outset, it is important to nominate a person who has general responsibility for the project

• Full participation - get everyone on board;
if performance comparisons are introduced in the wrong way, without explanation and supportive management, they can alienate the drivers and lead to poor results your performance management system the ability to record changes, such as new vehicles or equipment

• Operational changes - always build into

• Individuals’ behaviour - human behaviour
can always affect results, so one-off observations can be misleading

23

Improving Performance in Your Operation
This section looks at some of the actions you can take to improve efficiency in your own operation. These are broken down into four key areas: operational efficiency, efficient fuel management, efficient equipment and systems and efficient people through developing skills.

Operational Efficiency
Vehicle Routing & Utilisation
Medium-sized and larger fleets often use computerised vehicle route scheduling (CVRS) packages which can collect and provide data to help measure performance levels and, in particular, show where certain routes or depots are more efficient than others in terms of, for example, vehicle fill, kilometres per drop and time utilisation. In general, using CVRS can:

• Reduce journey times and vehicle mileage • Improve the variety of delivery schedules • Plan the most effective route • Maximise the efficiency of deliveries • Reduce the number of journeys and vehicles required

For more details, see the Freight Best Practice Guide Computerised Vehicle Routing and Scheduling (CVRS) for Efficient Logistics.

24

Alstons Cabinets
Alstons Cabinets supplies bedroom furniture from its base in Ipswich to over 2,000 customers across the UK. The vehicle fleet consists of 22 rigid vehicles and trailers, completing between 500 and 600 orders every week. Just a few years ago the whole order process was carried out manually using specific customer orders as the basis for manufacturing planning. The simultaneous introduction of Material Requirement Planning (MRP) and Paragon CVRS software has radically changed the process, and improved the efficiency and effectiveness of manufacturing planning. Orders are now downloaded into Paragon for routing, before being uploaded into the MRP system for production planning. As customer time windows and delivery preferences are held in the CVRS system, successful planning no longer depends on someone’s memory when planning routes. Consequently, errors have been reduced and orders are no longer ‘forgotten’ because of people working under pressure. Other areas have benefited from improved communication. With suitable system interfaces, the information in electronically generated routes can be circulated widely, quickly and accurately. These actions have drastically reduced internal queries and errors, and improved the response to customer queries. There have also been a number of operational benefits. Better routes and more effective use of vehicles have enabled the fleet size to be reduced by 20% (from 25 to 20 vehicles), bringing with it reductions in running costs and revisions to contract hire arrangements, without any negative effect on customer service.

If you do not use a vehicle routing and scheduling system you can collect information by other means.

Satellite Navigation ensures drivers know their way, helping to prevent wasted time and fuel.

Improving Vehicle Utilisation
Better vehicle utilisation is a straightforward and direct way of cutting costs by making more efficient use of vehicles and drivers’ time. One way to increase overall utilisation is through ‘back-loading’ - making use of spare capacity on the return leg of a delivery. Some companies regularly operate back-loading, while the nature of other operations means that it is not possible. A Good Practice Guide to back-loading specifically for smaller operators is available which highlights operational benefits, ways to find back-loads, issues affecting different types of operation, and potential barriers and constraints to back-loading.

25

See the Freight Best Practice Guide Make Back-loading Work For You.

Telematics
Telematics systems are applications that use computers to control and monitor remote devices or systems. The management software in telematics systems can turn the data collected into information that will help you to manage vehicles, drivers and operations more effectively. Several kinds of management software are available, including pure reporting packages, those with mapping and text facilities, or ordertracking systems linked with ordering and accounting software. The software may operate on a single PC, on a network or via a website.

See the Freight Best Practice Guide Working Together to Improve the Operational Efficiency of Regional Distribution Centres (RDCs) for more information on efficiency in warehousing operations.

Improving Internal Communication
The actions of the order processing or sales department can have a substantial impact on the operational efficiency of the warehouse and the distribution fleet. There is no substitute for a good working relationship and communication between operations and the sales department but this can be helped by impartial measurements of performance. So as well as more typical sales-driven volume measures, more precise measures that might affect freight fleet efficiency can be used. These might typically include the instances where order-taking error leads to redelivery or the number of late orders processed for delivery outside the agreed lead time.

Improving Warehouse Operations
In all fleets serviced by warehouse operations, fleet performance can be dramatically affected by the operational efficiency of the warehouse. Performance measures may be put in place to help to monitor the on-going service levels between the fleet and warehouse; this may be internal to your company or a performance agreement between a vehicle fleet collecting or delivering to a third-party warehouse. Depending on the nature and scale of warehousing operations, performance of a range of operational components can be measured, ranging from individual warehouse staff to the performance of the whole combined operation. Measures might include productivity rates, levels of product damage, stock rotation efficiency and order completion i.e. meeting loading deadlines.

Efficient Fuel Management
Driver Training
A fuel management programme is a series of actions you can take to better manage fuel throughout its life at your operation - from purchase and acquisition to storage and use. All of these areas are important, however, research has shown that the greatest single influence on fleet fuel efficiency is that of the driver, in terms of their driving style and technique.

26

Improving Fuel Efficiency at Thorntons plc
Thorntons is a major UK manufacturer and retailer of premium confectionery, with more than 4,200 employees. The company links manufacturing, packing, warehousing and distribution operations in one location. A fuel management programme was originally implemented in 1995 as part of the company’s commitment to:

A 3% improvement on fuel efficiency of the whole fleet was achieved in one year, corresponding to a cost saving of £7,300 per year. Staff running costs were £4,200 per year, giving net annual savings of £3,100. Phase 2 introduced data loggers which could measure the following indicators of fuel consumption:

• Speed • Idling time • Harsh braking • Rapid acceleration
The in-cab unit would warn drivers with a beep every time they moved out of pre-set parameters, and the violation is recorded. Phase 2 achieved a 5.8% improvement in fuel efficiency worth £14,500 per year. Net annual savings are £10,380, taking into account £1,040 for the production of weekly reports and £3,080 for the running costs for staff and data loggers. Each driver’s performance is displayed on a notice-board, showing current fuel performance, last year’s fuel performance and the driver’s individual target. League tables allow drivers to compare performance, which allows for some friendly competition and motivation.

• Reduce distribution costs • Improve operational efficiency • Reduce the environmental impact of its
distribution operations The encouraging results achieved convinced Thorntons of the need to develop and refine the programme to maintain and increase savings and to achieve further environmental benefits. In recent years, it has invested further in computerised fuel monitoring equipment and introduced a range of key driver performance indicators linked to financial bonuses. The success of this incentive scheme is due primarily to its careful management, which allows individual drivers to raise issues and explain any underperformance on a weekly basis. Phase 1 of the fuel management programme measured fuel consumption data with data collected manually.

Fuel Recording Systems
Fuel recording systems can help you to measure and monitor your fuel use. The simplest fuel recording method is to record fuel pump readings manually for each vehicle and, by combining these readings with vehicle distance travelled, it is possible to work out the MPG. Managers should be aware that there are a range of issues with fuelling systems that require close management - users should be aware of the risks from data entry problems, power supply issues, leaks from the tank or pipework and even possible fraud. Early warning of any of these issues can save the business a considerable amount of money.

27

Example of an In-vehicle Fuel Recording System
At Premdor’s depot in Barnsley, MPG figures are measured using the Siemens VDO system. There is a vehicle-mounted control box which measures the fuel going into the engine. The advantage of this system is that it can measure the performance of each driver in terms of MPG. After the system was installed MPG improved by 10% across the fleet. This worked out as a saving of £65,000 per year on a 35-vehicle fleet. Owing to ongoing monitoring using KPIs, the marked improvement in fuel consumption has been maintained.

Tip
When buying a new vehicle, it can be tempting to go for the least expensive option that will ‘do the job’. However, running costs add up to far more than initial purchase costs over the life of a vehicle. A vehicle specified to meet your individual needs will cost you less to run and will perform more effectively. Whole-life costing, taking account of likely vehicle residual costs as well as on-going operating costs, is the key to getting vehicle specification right from the outset.

Example of an Electronic Fuel Pump System

Vehicle MPG can also be measured through pump-based systems where fuel is bunkered on site. A vehicle key or card can be inserted and the amount of fuel dispensed is automatically recorded and submitted to a central system for analysis.

Efficient Equipment and Systems
All freight transport operations rely on the performance of a variety of physical equipment, from delivery vehicles to fork-lift trucks and roll cages. It is important to understand how each piece of equipment used in the operation is performing and to understand whether you have the best specification of vehicle or other piece of equipment for the job required.

Improving Vehicle Specification
It is important to compare the performance of different vehicles by make and model and equipment specification. It may then be possible, over a period of time, to see the difference that vehicle specification makes, thus influencing future purchases. Factors affecting efficiency might include maximum permissible weight, vehicle size, engine power, torque, gearbox, final drive ratios and the aerodynamic styling of the vehicle.

Marshalls Construction is a leading UK manufacturer of paving for landscaping gardens, paths and driveways, as well as walling and edging products. The company has installed tanks with Triscan monitoring equipment at a number of its depots. It has a card system operated by Keyfuels which links the fuel data for a vehicle regardless of whether it is refuelling at a depot or at a Keyfuels site. Keyfuels then issues each depot with a weekly report giving fuel figures and MPG for each vehicle. vehicle. The system will benefit Marshalls by giving it more control over the operation through the ability to monitor drivers and vehicles from the report information provided.

28

See the Freight Best Practice Guide Truck Specification for Best Operational Efficiency for more information.

successful operational benefits, such as enabling a reduction in the size of the fleet

Refrigerated Vehicles
Specialised vehicles such as refrigerated vehicles impose extra purchase and running costs, which means it is all the more important to keep a check on the costs of maintenance, fuel and other operating costs. Fridge units can be powered from a number of sources including: electricity, red diesel, white diesel, cryogenics (liquid nitrogen) or direct drive. By using a continuous performance measurement process, the operating costs of running a unit, which include maintenance and fuel, can be analysed separately to the main motive power unit of the vehicle. Hence, accurate specification of equipment will, over time, result in greater operational efficiencies, which can save significant amounts of money.

See the Freight Best Practice Case Study Focus on Double Decks for more information and the Focus (DIY) Ltd Case Study below. Buyers Guide to Refrigerated Transport Equipment.

Focus (DIY) Ltd
Focus (DIY) Ltd found that cubing out before weighing out is a particular problem with their range of products being delivered on a fleet of single-deck and fixed double-deck trailers. A nine-month feasibility study with a prototype moving a double-deck semi trailer demonstrated its potential to improve operational efficiency, with the benefits being the potential to reduce the fleet size. Other benefits included reduced overall mileage, lower fuel costs and shorter waiting times at loading docks. Using the double-deck trailer compared to two single-deck trailers gave the following benefits:

• Mileage reduced by 257 miles (413 km), • Fuel costs reduced by £108 (based on

saving £378 in operating costs (based on an operational cost of £1.17 per mile) a fuel price of £0.70 per litre) and lower CO2 emissions is required to deliver the same load vehicle required)

The capital cost of refrigerated transport equipment may account for less than 50% of its whole-life cost when maintenance, fuel and other operating expenses are taken into account.

• Halving working time, as only one driver • Improved average utilisation (only one

Double-deck Trailers
Many businesses suffer from inefficiencies in their deliveries due to variable product sizes, meaning that efficient vehicle fill is difficult to achieve. Innovative vehicle specification can help to improve vehicle fill and increase productivity. Performance measuring can help to verify that the introduction of double-deck trailers has had

29

Christian Salvesen

Padding Block

Christian Salvesen delivers tyres for Dunlop on a national contract from Birmingham. The company chose a system of ‘swap-body’ technology to help it trunk tyres efficiently around the motorway network whilst being able to use small, urbanfriendly rigid vehicles for the actual delivery of the tyres. The company sends at night several drawbar lorries from the National Distribution Depot to eight regional locations, each with three full 4.7-metre demountable boxes. The prime mover has one box and the trailer two boxes. The night driver arrives at the regional centre, drops the legs on the full boxes and collects the three empty boxes for return to Birmingham. Then next day small delivery vehicles take just one box each around the local urban area, visiting the tyre distributors and returning to the regional yard at the end of the day in time for the night trunk.

The operation also avoids the need to tranship the tyres from a large lorry to a small vehicle. The company has 120 boxes and regularly uses more than 80 each night. The idea has been copied by other companies in the food, parcel delivery, retail and tyre industries. The main benefits are:

• Reduced driver waiting time while
loading takes place drop-off sites

• Facilitating the use of unmanned • Fewer transfers of stock • Minimised storage requirements

Demountable Bodies
Demountable bodies offer another approach to improving operational efficiency through vehicle specification. Demountable bodies enable drivers and vehicles to be used more intensively owing to quicker turnaround times at the depot. Essentially, drivers do not have to wait for the vehicles to be re-loaded. In terms of KPIs, a company can measure demountable efficiencies by analysing the loading times which would cause a standard vehicle to be standing in non-working activity. Efficiency gains can also be made with regard to reduced damage to products. If high-value, awkward-to-handle products are being transported between depots and transhipping is required, then looking at the statistics on damages can show whether it would be worth introducing a demountable operation to reduce the cost of damage.

30

Condition of Vehicle Fleet
Other factors influence vehicle performance, such as age and general condition of the vehicle, especially in terms of engine, axles and tyres. Ensuring the most appropriate vehicle specification for the tasks that are expected to be performed will improve both fuel and operational efficiency. There is often a financial trade-off between the initial investment required to buy a higher specification vehicle and the cost of operating the vehicle over a long period. For example, the effects of using a vehicle that makes loading and unloading of the product difficult, or poor manoeuvrability of the vehicle in an urban environment may increase delivery time. By collecting data on vehicle maintenance costs, fuel used and average loading and unloading times, a fleet manager can begin to work out the operational costs of running the vehicles in the fleet. This can then be set against the cost of the vehicle lease or purchase.

Correctly fitted aerodynamics equipment can improve performance significantly

Tip
A truck specified or fitted with the correct aerodynamic styling can use 6-12% less fuel compared to a vehicle with little, or badly adjusted, aerodynamic equipment. You do not even have to replace your vehicles – there is a range of add-on features available that can significantly improve the aerodynamics of many vehicles on the road today. The Freight Best Practice programme offers a comprehensive and pocket-sized guide which:

• Provides a brief introduction to • Helps you to work out which

aerodynamic styling and its benefits aerodynamic features are suited to your operations savings from any features fitted to your vehicles

Aerodynamic Styling
Aerodynamic styling fitted to goods vehicles can significantly reduce fuel consumption, but this saving has to be weighed against the cost of fitting aerodynamic styling products. However, it may be possible to test the benefits by benchmarking two similar vehicles, one of which has good aerodynamics and one which does not. It is then possible to see the effectiveness of the aerodynamics for the particular transport operation. Maintenance costs should also be taken into account. In-fleet trials provide a basis for understanding these costs.

• Shows you how to maximise the fuel

• Points you to further information

See the Freight Case Study Smoothing the Flow at TNT Express and Somerfield using Truck Aerodynamic for more information.

Tyres
Most operators know that improving the aerodynamic performance of their vehicles can reduce fuel consumption. However, did you know that the rolling resistance of the vehicle’s tyres can also have a significant impact on the amount of fuel used? Suppliers claim that fitting tyres with a 25% reduction in rolling resistance on all axles of a vehicle could improve its fuel consumption by at least 5%. Monitoring and maintaining the correct tyre pressure is essential and the potential for contributing to maintaining and improving standards is too important to ignore. (See the Moy park mini case study on page 23.)

31

In-fleet Trials
Many suppliers test their own products and give estimates of potential savings, but these are likely to be variable in different applications. Therefore, it is recommended that operators consider conducting an in-fleet trial to ensure the suitability of vehicles, equipment or systems before embarking on a potentially expensive acquisition programme. An in-fleet trial is the testing of a vehicle, equipment or systems in normal service as part of the day-to-day transport operation to see if it is suitable for the intended application and able to produce noticeable benefits to the operator. This is the concept behind manufacturers offering demonstration vehicles/units to operators for a period of time. In-fleet trials can be used to measure any intervention from physical changes to vehicles, such as changes to the gearbox, tyres or aerodynamic design, or changes to the way the vehicles are driven through drivers undergoing driver training. Tests can be carried out relatively easily and can provide valuable information, helping to influence future decisions on the purchasing of equipment and systems, or analysing the effectiveness of training approaches.

help you improve performance.

Drivers and Operational Staff

• In general, there are 3 key skill areas for
drivers and operations staff:

• Technical Skills - Safe and Fuel Efficient

Driving, Telematics and Computer skills, driver checklists and maintenance skills Communication and Team work Driver Legislation and hazardous goods

• Personal Skills - Customer Care,

• Knowledge - Knowledge of the vehicle, EU
Driver and operational training is vital to the successful performance of any operation. By establishing KPIs you can set a company standard and identify any problems that occur. A good method of achieving this for drivers and operational staff is to create league tables. League tables can measure performance in several different areas such as fuel efficiency, number of accidents, product damage, on-time deliveries and communication errors. They can also create a healthy competitive atmosphere within the organisation. Effectively, this method of performance measuring allows you to efficiently allocate your resources where training is actually needed. While league tables can be very useful, it is important that drivers do not become de-motivated as a result of performance being measured. Instead, performance measuring needs to take on a positive and proactive nature, where training is given to improve overall performance and enhance the employee’s skills. Once weaknesses in employees’ skills have been identified, you can set about rectifying the problems. Designated driver instructors can help to improve fuel efficiency by introducing simple driving techniques. Driver training is not just restricted to fuel efficiency, and KPIs can also illustrate deficiencies in safe driving. The Safe and Fuel Efficient Driving (SAFED) training programme was designed as a single scheme aimed at improving the driving techniques of heavy goods vehicle drivers

Efficient People through Developing Skills
Your employees are your main asset and play a vital role in delivering services. Investing in training and development can help you adapt to technological changes and improve efficiency. Training and development can also help you improve employee retention, which has been a significant problem in the transport and logistics sector. Selecting the right KPIs can help you identify the areas within your business that are under performing, and as a result identify training that could help your staff. Training and development should not be restricted to drivers and other operational staff, but should be aimed at people across all levels of your organisation. The sections below provide an overview of how training can

32

Moy Park Ltd
Derbyshire-based Moy Park Ltd operates a fleet of 42 commercial vehicles. Comprised mainly of tractor units, together with a number of rigids, the fleet is used for supplying poultry products to customers nationwide. The company has been using Michelin tyres for over 10 years, managed by local dealer, TyreMiles. In May 2003, the company took delivery of four new Mercedes Axor 18.40 4x2 units and, for the purpose of a three-month trial, specified two with Michelin 295/80 R 22.5 energy low rolling resistance tyres and two with competitor’s tyres. All vehicles had similar working patterns during the trial and operated at 38 tonnes. The trucks running on energy efficient tyres recorded a fuel saving of 8% over the competitor tyre fitted on the other vehicles. Running 20 vehicles on the energy tyres led to an annual fuel saving of nearly £7,600. Garage Manager Nigel Nash explained “Despite the cost of tyres being 3% of running costs for commercial vehicles, specifying the right tyre can have a significant impact on reducing one of our main expenditures - diesel”.

administration staff and managers understand the concept of performance management so that they can correctly collect information that can help you improve your operation. If the information is collected correctly, then problems can be identified and tackled quickly. Communication is a key skill in the success performance of any logistics company. Managers should be able to effectively communicate instructions to team members and likewise administration staff should be able to communicate vital information to the drivers and operational staff. Once again KPIs can be set to identify shortfalls in this area.

How Does Performance Management Encourage Staff?
Everyone should have continual professional development in your organisation. If carried out appropriately, performance management can encourage staff to become efficient in their everyday activities. This process will identify weaknesses that can then be improved, but also raise the standard of your employees. This will not only benefit your business as a whole but employees will feel more fulfilled and be more likely to stay longer and work harder. There is a large range of professional training courses available for drivers, administration and managerial staff including SAFED, General National Vocational Qualifications, Certificates of Professional Competence and other accredited courses. The following organisations will help you identify relevant development courses for your staff;

Administration and Management
Administration and managerial staff also need technical, personal skills and knowledge, but the specific skills they use from day to day are different to those of drivers:

• Technical Skills - Computer literacy,

• SAFED (www.safed.org.uk) • Skills for Logistics (www.skillsforlogistics.
org)

Performance & Financial Management, and Telematics skills communication, team-building and customer service

• Personal Skills - Commercial awareness,

• The Chartered Institute of Logistics and
Transport (www.ciltuk.org.uk/) It is imperative that every part of the business is involved to ensure full participation and ‘buy in’ to performance management

• Knowledge - Transport policy, health and

safety legislation and customer priorities

Understanding new technology can maximise efficiency and performance, and it is important that managers and administration staff are computer literate. It is also important that all

33

Safe and Fuel Efficient Driving (SAFED)
The Safe and Fuel Efficient Driving (SAFED) training scheme has been specifically developed to enable both vehicle operators and training providers to implement driver training within the road freight industry. The training covers all of the following areas on which drivers can have focused training:

The DfT SAFED driving scheme has benefited many companies, with considerable fuel savings achieved.

Clugston Distribution Services
Benefits highlighted:

• Average fuel consumption improvement of
7.3% for 23 drivers

• One driver trainer improved fuel • Useful refresher on safety

• Adjustable aerodynamics • Braking • Clutch control • Cruise control • Exhaust brake • Forward planning • Gear selection • Hazards • Height of load • Positioning of load • Speeding • Low revs, low noise and low emissions • Planning of route • Tyres • Weather conditions

consumption by 13.5% on the day

Winfield Transport (Cannock) Ltd
Benefits highlighted:

• Average fuel savings of 3.2% • Projected fuel cost savings of £6,500/year • One driver’s gear changes reduced from 109
to 70 over the same route

• One driver’s fuel consumption improved by
over 12% in the four weeks after training

• Driving in a more relaxed way

34

For more information on SAFED, see the following publications SAFED for HGVs: A Guide to Safe and Fuel Efficient Driving for HGVs, Companies and Drivers Benefit from SAFED for HGVs: A Selection of Case Studies, SAFED for Vans: A Guide to Safe and Fuel Efficient Driving for Vans. SAFED in the Aggregates Sector Website: www.safed.org.uk SAFED for Vans Website: www.safed.org.uk and click on the SAFED for Vans logo A full list of the FREE Freight Best Practice publications can be obtained from the Hotline 0300 123 1250 or by visiting the website at www.businesslink.gov.uk/freightbestpractice

35

A Checklist for Measuring and Improving Performance
Understanding and monitoring performance can be challenging. This guide has aimed to give you, the decision-maker, an understanding of the performance management concepts, advice on putting a performance management process in place and a range of initiatives you can introduce to improve your operation’s performance. Measuring current performance is a fundamental first step you need to take before you can put measures in place to improve operational efficiency and reduce costs. The table below shows some important questions you can ask to help set up a performance measurement system in your organisation.
Performance Management Checklist Have you reviewed your existing KPIs or looked at those that might be appropriate for your type of operation? Are they specific, measurable, achievable, realistic and to timescale Have you set targets for these KPIs? Do you know how well your operation is performing against your targets? Do you need to raise or lower them Have you considered external benchmarking to compare your operation’s performance with that of others? Have you reviewed or set up a data collection system to give you the information you need? Do you have a good system in place for analysing and reporting your KPIs? Do you use information technology systems to help you? Have you considered actions that can be taken to improve your operation’s performance and meet new, higher targets in the future? or X

36

KPIs Used in the Freight Best Practice Fleet Performance Management Tool and Information Needed to Calculate them
Area KPI Data Required Rent cost/depreciation, road fund licence cost, O Licence cost, no own driver costs, agency driver costs, fuel costs, tyre maintenance costs, maintenance cost planned/unplanned, number of trips, units carried, distance travelled/number of trips Rent cost/depreciation, RFL, O Licence costs, annual insurance costs, own driver costs, agency driver costs, fuel costs, tyre maintenance costs, maintenance costs planned/unplanned, distance travelled/number of trips Own driver costs, agency driver costs, fuel costs, tyre maintenance costs, maintenance cost planned/ unplanned, distance travelled/number of trips Rent cost/depreciation, road fund licence cost, O Licence cost, annual insurance cost, number of A/C periods, distance travelled/number of trips Own driver cost, agency driver cost, distance travelled/number of trips Maintenance cost planned/unplanned, distance travelled/number of trips Maintenance cost planned/unplanned distance travelled/number of trips Fuel litres, distance travelled/number of trips Odometer opening, odometer closing Number of empty miles, distance travelled/number of trips Number of empty miles, distance travelled/number of trips Capacity, distance travelled/number of trips, units carried Time vehicle available, time vehicle used, distance travelled/number of trips Average cost per unit delivered (£)

Total whole vehicle cost (p per mile) Average running cost (p per mile) Average standing cost (p per mile) Average driver cost (p per mile) Total maintenance cost (p per mile) Total maintenance cost (£’000) Average miles per gallon Total miles run (‘000s) Total empty miles run (‘000s) Percentage empty running total Average vehicle fill Average time utilisation

Cost

Operational

37

Area

KPI Percentage of late deliveries total

Data Required Number of deliveries, number of collections, number of late deliveries, distance travelled/ number of trips Number of deliveries, number of collections, number of damages, distance travelled/number of trips Number of deliveries, number of collections, number of complaints, distance travelled/number of trips Number of overloads, distance travelled/number of trips Number of traffic infringements, distance travelled/ number of trips Number of driver infringements, distance travelled/ number of trips Number of blameworthy accidents, number of nonblameworthy accidents, distance travelled/number of trips Number of inspections due, number of inspections overdue/failed, distance travelled/number of trips Number of defects, number of defects rectified in last 24 hours, distance travelled/number of trips

Service

Percentage of damages total Percentage of complaints total Total number of overloads Total number of vehicle traffic infringements

Compliance

Total number of drivers’ hours infringements Total number of traffic accidents Percentage of failed inspections total

Maintenance

Percentage of defects rectified in 24 hours total

38

39

Freight Best Practice publications, including those listed below, can be obtained FREE of charge by calling the Hotline on 0300 123 1250 or by downloading them from the website www.businesslink.gov.uk/freightbestpractice
Saving FUEL Performance MANAGEMENT

This guide provides step by step advice for creating a comprehensive CO2 inventory and the benefits this can bring. It provides templates to enable the reader to monitor the amount of CO2 produced by its Trucks, Vans, Warehouses, MHE and Company Cars.

Monitoring and Understanding CO2 Emissions from Road Freight Operations

Fuel Efficiency Trials Guide

This guide describes a 12-step standardised process for transport operators to use when considering the trial for a fuel efficiency intervention – an important starting point in understanding the operational efficiency savings that could be possible for your fleet.

Developing - SKILLS

Transport Operators’ Pack - TOP
TOP provides practical ‘every day’ support material to help operators implement best practice in the workplace and acts in direct support of tasks essential to running a successful fuel management programme

Safe Driving Tips

Written especially for commercial vehicle drivers, this pocket-sized guide provides essential safety hints and tips on all aspects of driving safely.

Equipment & SYSTEMS

Case STUDIES

Truck Aerodynamic Styling

This guide offers practical information on aerodynamically effective styling for trucks including appropriate add-on features.

Engine Idling – Costs You Money and Gets You Nowhere!
This case study provides evidence from 4 operators that by implementing anti-idling strategies an operator can save money by reducing fuel consumption and at the same time decrease CO2 emissions.

February 2010. Printed in the UK on paper containing 100% recycled fibre. FBP1047© Queens Printer and Controller of HMSO 2010.

Sponsor Documents

Or use your account on DocShare.tips

Hide

Forgot your password?

Or register your new account on DocShare.tips

Hide

Lost your password? Please enter your email address. You will receive a link to create a new password.

Back to log-in

Close