The Road to Freight Operational Efficiency ? Performance Management
J James, Faber Maunsell, UK
This paper examines the DfT's Freight Best Practice programme and its aims of reducing fuel consumption
When the Kyoto Protocol was signed, the UK agreed to reduce emissions by five percent. The Government expected all sectors to ?do their bit? towards cutting emissions. As the haulage sector makes up eight percent of all emissions, it was a critical target for improvements in environmental performance. So, how do you get commercial transport operators to comply with government aims to lower emissions? The simple answer is helping them to reduce their fuel consumption and thus improve their bottom line profitability. This is the aim of the Department for Transport?s Freight Best Practice programme (FBP). This behavioural change programme is unique across Europe and more advanced than other such programmes around the world such as the USAs Smartway programme.
The FBPP aims to help freight operator profitability by helping them save fuel. Fuel is a very significant component of operational costs for haulage operators (approximately 30% in most operations) and therefore reducing total fuel consumption is an inherent motivation. Reducing the amount of fuel consumed does have a knock-on environmental benefit by reducing the quantity of emissions produced (a litre of diesel producing 2.68kgs of CO2). The FBPP methodology provides free information on how organisations can create operational efficiencies to monitor and thus successfully reduce fuel consumption.
Putting this theory into practice has been the major challenge for the FBPP. A free information framework has been developed, aimed at all workers in the haulage industry. Some information is aimed at drivers, in a series of pocket guides and training materials. However the majority of information is aimed at transport managers. This material includes a series of guides to facilitate external benchmarking against others in a range of sectors (such as food, next day parcel delivery, and pallet networks) and to provide information on ?Best-in-Class? performers. These publications are supported by software tools, to assist with practical internal benchmarking, within the fleet. This provides them with suggested methodology and resources to accurately monitor the performance of their fleet, as measurement and understanding are the first steps towards effective operational performance management.
To take the example of external benchmarking first, a series of guides have been produced with information gathered by survey from key players in a range of industry sectors. For each, a separate guide has been produced, presenting the results of the same five Key Performance Indicators (KPIs), these are:
o Vehicle Fill.
o Empty Running.
o Time Utilisation.
o Deviations from Schedule.
o Fuel Consumption.
The results provide best in class information for the transport manager to use to compare, contrast and target set their own operations. The variations between different operations efficiency can be significant, for example in the next day parcel delivery sector, the proportion of empty running varies between fleets from zero to fifty percent of the time. Once the factors that influence this can be understood, they can be used to help managers to modify their operations to achieve theses benefits.
The FBPP also provides a mechanism for the fleet manager to allow accurate measurement of the KPIs within their own fleet, or internally benchmark. The Fleet Performance Management Tool is a PC based software tool (complete with manual) to allow operators to track fleet performance week on week for 22 KPIs. This tool can be used to measure performance for up to 25 vehicles for up to a two year period.
All this information is made available free of charge through a number of channels, such as attendance and exhibition at major industry events, including the annual Commercial Vehicle Show (CVS), attendance at industry group events such as Road Haulage Association and Freight Transport Association member meetings and through a dedicated programme website (www.freightbestpractice.org.uk).
In a recent independent assessment of the English programme it was shown that the Freight Best Practice programme has helped save industry £190m over the past 2 years in comparison to £65m in the 2003 impact assessment.
Association for European Transport