Key performance factors in road transport

Maintaining a competitive and profitable transport business means keeping careful watch on a host of key performance indicators, says Vic Oliver.

The start of the New Year is as good a time as any for road transport operators to re-examine the management of key performance factors in their business. Competent management saves money and increases profits, but practices and processes need to be continually monitored, refreshed and upgraded – especially given the type of tough, competitive market environment that has been experienced globally for the last few years.

Before anything else, the basics need to be right in all sectors of the business. Daily operations must be watched carefully and immediate steps taken to address any procedures that start to run out of line or fall by the wayside.

In addition to the daily monitoring and controlling of basic vehicle operating costs (both fixed and variable), it is essential to control and monitor other related key performance factors such as vehicle productivity. Operators should constantly focus on ensuring that all vehicles in the fleet are fully and effectively operating at optimum capacity. Fleet size must also be carefully controlled to ensure that there are sufficient vehicles in the line-up to do the job effectively without having some standing idle.

Workshop productivity also has to be maximised. Ensuring that all the available labour hours are effectively used is one way to safeguard efficiency. These hours are being paid for and if they are not used timeously, they are lost – they cannot be stored for use at a later date! Workshop efficiency must also be carefully monitored every day. Productivity can be measured by comparing the number of hours worked in relation to the standard flat rate time set by the vehicle’s manufacturer.

Retaining satisfied customers is another important key performance area, as competitors will be monitoring the organisation’s customer base and trying to pinch its best clients. Looking after customers and giving them world-class service is therefore another critical performance area to be carefully monitored. Ensure that the entire team is aware of the importance of looking after customers and is well-versed in treating the client base with the utmost respect.

It is also important that proficient technicians and administrators are well looked after in order to ensure that they are not enticed away by competitors. Offering attractive reward incentives to employees for efficiency and work well done is an excellent tool to get people to perform at their best.

Past surveys that have analysed the roles employees play in making a business successful have found that if the following points are understood and implemented by staff members, the company tends to succeed:

• Do I know what is expected of me at work?
• Do I have the material and equipment I need to do my job right?
• Do I have the opportunity to do my best every day?
• Have I received recognition or praise for good work in the last seven days?
• Does my supervisor, or someone at work, seem to care about me?
• Is there anyone at work who encourages my development?

Positive responses to the above questions correlate to higher productivity, profitability, employee satisfaction, customer satisfaction and staff retention. So, to reiterate, a focus on the retention of its best people is critical for a transport business to survive and continue to produce positive results.