fbp1049 kpis builders merchants sectorsmmn

7/27/2019 FBP1049 KPIs Builders Merchants Sectorsmmn

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Key Performance Indicators for the

Builders Merchants Sector

Ben

chmarkingGu

ide


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Acknowledgements

The following builders merchants took part in this

benchmarking survey and are thanked for their

participation:

Travis Perkins Group

Wolseley UK

Bradford and Sons Ltd

Buildbase Ltd

Long & Somerville Ltd

UGS Ltd

The BSS Group

Saint-Gobain Building Distribution

In addition, the Construction Products Association and

Builders Merchants Federation are thanked for their

important contributions.

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Contents

1 Background 1

1.1 Measuring Performance in Your Own Business 1

1.2 What Should a Key Performance Indicator Be? 1

1.3 Which KPIs Are Right for Me? 2

1.4 External Benchmarking 4

2 The Builders Merchants Benchmarking Survey 5

2.1 The Nature of the Builders Merchants Sector 5

2.2 The KPIs 5

2.3 Survey Statistics 6

3 Survey Results 8

3.1 Number of Runs per Day 8

3.2 Number of Drops per Run 9

3.3 Kilometres per Drop 10

3.4 Number of Drops per Day 11

3.5 Value per Drop 12

3.6 Fuel Consumption 13

3.7 Fuel Used per Drop 14

3.8 Cost per Drop 16

3.9 Percentage of Contrained Loads 173.10 Deviations from Schedule 17

3.11 Time Utilisation 18

4 Summary 19

5 The Builders Merchants Transport Efficiency Road Map 19


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1 Background

Every successful organisation needs to manage its

assets effectively and can benefit from benchmarking

its performance against that of direct competitors and

those held to be excellent in its sector.

The Department for Transport, through its Freight BestPractice programme, has supported a series of

benchmarking surveys that have developed a range of

key performance indicators (KPIs) in a variety of

industry sectors.

Already published are KPI survey guides for the

following sectors:

Key Performance Indicators for Non-food Retail

Distribution

Key Performance Indicators for the Food SupplyChain

Key Performance Indicators for the Pallet Sector

Key Performance Indicators for the Next-day

Parcel Delivery Sector

All of these publications are available FREE of charge

from the Freight Best Practice programme website

www.freightbestpractice.org.uk and from the Hotline

0845 877 0 877.

KPIs used in external benchmarking are essential tools

for the freight industry to understand and then improve

its performance. They provide a consistent basis for

measuring transport efficiency across the fleets of

different operators, comparing like with like.

This benchmarking survey, instigated by the

Construction Products Association and conducted with

their help and with the assistance of the Builders

Merchants Federation, considers the delivery activities

of builders merchants and provides KPI comparisons

between the participating fleets.

It aims to:

Show participating companies how their own

performance compares with that of others

Highlight how the best operators in class are

able to achieve their ratings

Identify recommendations on how to improve

efficiency

Operators in the sector, whether survey participants or

not, can use this benchmarking guide to identify real

opportunities to maximise transport efficiency, reducing

both running costs and environmental impact.

1.1 Measuring Performance in YourOwn Business

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 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 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 to make decisions. This meanssetting a target and measuring and monitoring KPIs

over a period of time to see how your operation

performs 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.

1.2 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.


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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 tohave an in-depth knowledge of the area being

measured.

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, comparingdrivers 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.

Achievable

Any targets that are set should be achievable. It mayseem beneficial to set high targets in the hope that this

leads to greater improvements in performance,

however, 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.

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.

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, dailydelivery 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.

1.3 Which KPIs Are Right for Me?

The size, type and management structure of a

company is likely to influence the range 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.

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.

Figure 1 shows a basic step-by-step process formeasuring performance. The checklist on the following

page shows some important questions you can ask to

help set up a performance measurement system in

your organisation.

The 11 KPIs developed and used by the companies

that participated in the builders merchants

benchmarking survey are detailed in Section 2.2 of this

guide.

See the Freight Best Practice Guides

Performance Management for Efficient

Road Freight Operations

This guide explains the process of

measuring performance effectively. Itincludes advice on how information is best

collected and interpreted to allow informed

decision making in order to achieve

operational efficiency improvements.

Fleet Performance Management Tool

This spreadsheet tool is designed to help

operators measure KPIs and manage

performance.


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Set and Review Targets

Select KPIs

Reporting & Feedback

Data Collection

Yes

Yes

No

No

Review/Evaluation

(Including Benchmarking)

Identify Strategy forPerformance Improvement

Take Action

Implement Strategy

Results

Targets

met?

Targets

too high?

Performance Management

Checklist:

or

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 Timed? (SMART)

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 operations 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 betaken to improve your operations

performance and meet new, higher targets in

the future?

Figure 1 The Process of Selecting and Measuring KPIs


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1.4 External Benchmarking

The basic process of measuring performance internally

is extremely useful but to fully understand how your

operation compares with that of your competitors, you

must benchmark your performance with the

best-in-class performers in your sector.

This process of external benchmarking will enable you

to understand the characteristics displayed by the

best-in-class performers across a range of KPIs. In

other words, understanding exactly why some

operators perform better than others in certain KPIs will

help you to decide the best measures to implement in

your own operation to improve operational efficiency.

This benchmarking survey guide for the builders

merchants sector is designed to highlight the

performance of some of the best-in-class operators

within the sector, enabling you to compare the relative

efficiency of your own fleet operation and identify

measures that you can take to improve performance.

Throughout this guide you will see charts showing theKPI survey results. Each chart shows the participating

depots relative performance (see the example chart

below).

Figure 2a Heavy Deliveries - Runs per Day

KPI

Sector Average

Individual Depot

Unique Number

of Each Depot


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2 The Builders MerchantsBenchmarking Survey

2.1 The Nature of the BuildersMerchants Sector

Builders merchants supply a diverse range of materials

essential to the construction industry, with a significant

proportion delivered as well as over the counter trade

where the buyer collects the goods. These include the

so-called heavy materials such as bricks, blocks, sand

and aggregate, and light materials such as fixtures,

fittings, tools, plumbing and heating supplies.

The sector comprises national, regional and local

merchants. Like many industries, there has been a

trend in recent years towards the acquisition of smaller

companies by larger national or even Europe-wide

businesses.

Although many of the larger builders merchants have

either national or regional distribution centres (RDCs),

their customer interface is typically through local depots

serving a relatively small geographical area. The

survey detailed in this report deals with the transport

efficiency of these local depots.

The transport function of these depots in the sectortends to be seen as very much a derived demand. It is

there to serve a purpose, that of delivering goods to the

customer, and not as an entity in itself. A site or depot

might typically have a small fleet of three or four

vehicles that serve a local network of customers.

These include the general public, local builders and

large construction companies. Journey lengths are

normally short and road access to delivery sites can be

tight, limiting the type and size of vehicles used.

Journey planning is based very much on the personal

knowledge of staff as to local routes and locations of

customers.

Vehicles of 7.5 tonnes gross vehicle weight (GVW) to

32 tonne GVW rigid vehicles form the mainstay of the

sectors fleet for carrying heavy materials. To facilitate

site unloading these vehicles are often equipped with

lorry-mounted cranes. Whilst light materials may be

carried on the larger rigid trucks (particularly when part

of a mixed light and heavy load), they are more

normally carried by vans and 7.5 tonne GVW vehicles.

Whilst regional and national merchants maintain overall

control of the fleet centrally and will have a nominated

transport manager or director, on a day-to-day basis

most vehicles are managed by the depot manager who

is very often not a transport professional by trade.

Their focus can be on customer service and not

necessarily transport efficiency. Orders are typically

taken for delivery of the goods on the next working day.

Builders will usually expect deliveries to arrive early in

the morning, to supply them with materials for that

days work. This early morning delivery pattern

compresses lorry activity into a narrow delivery window,potentially leaving other parts of the day with less work

to do.

2.2 The KPIs

In any benchmarking survey it is essential to establish

and use the most appropriate set of KPIs possible and

ones that everybody in the survey can accurately

measure. A working group was established to develop

the KPIs for the sector. Members of the group included

representatives from the Construction Products

Association, the Builders Merchants Federation and

eight builders merchants.

The five core KPIs used in previous benchmarking

surveys (vehicle fill, empty running, time utilisation,

deviation from schedule and fuel consumption) were

considered, but not all of them were deemed to be

relevant to builders merchants transport operations.

Further KPIs were carefully considered and a set of 11

finally agreed, shown in Table 2.

Table 1 Categories of Deliveries and Examples of their Load

Type

Delivery Load Type Transport

Light Deliveries Heating and

Plumbing

equipment

Tools Fasteners

Van

Light/

Medium

Truck

Heavy Deliveries Aggregates

Bricks

Blocks

Medium

Rigid

Trucks

Large Rigid

Trucks


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Table 2 The KPIs Measured during the Survey

were:

These KPIs were selected because they:

Are effective reference points for monitoring

efficiency and identifying improvement

Are relevant to the interests of operators

Quantify the levels of fuel and vehicle use

Owing to the significant operational differences

between the delivery of heavy goods and light goods,

these activities were separately benchmarked.

However, the same KPIs were used for both light and

heavy activities.

Additional data was also collected from participants to

help further investigate the reasons for either aboveaverage or below average performance. This

information, including the fitment of auxiliary equipment

such as lorry-mounted cranes or tail lifts and the use of

in-cab telematics equipment, can be found in Table 4.

2.3 Survey Statistics

Eight builders merchants businesses participated in the

benchmarking process. They represented national,

regional and local merchants operating heavy, light ormixed depots. Table 3 provides further information on

the participating depots and fleets.

Light depots are those primarily supplying heating and

plumbing equipment, tools, fasteners and so on.

These goods are generally transported by van or

light/medium truck. Heavy depots are those principally

supplying aggregates, bricks, blocks and so on and are

typically transported on medium/large rigid trucks, often

with lorry-mounted cranes. Seven depots in the survey

operated fleets for deliveries of both light and heavy

goods. These are identified as mixed depots.

KPIs

Number of Runs

per Day

The number of times the

vehicle sets out from the depot

with a load

Number of Dropsper Run

The number of deliveriesmade per run

Kilometres per

Drop

The average distance between

deliveries

Number of Drops

per Day

The total number of deliveries

made by a vehicle in the day

Value per Drop The invoice value of the goods

being delivered per drop

Fuel Consumption The number of kilometres run

per litre of fuel used

Fuel Used per

Drop

The amount of fuel in litres

consumed per delivery

Cost per Drop The total cost per delivery

(including fixed and variable

costs)

Percentage of

Constrained

Loads

The proportion of vehicles that

during the loading process ran

out of payload capacity, deck

length or cubic capacity

Deviations from

Schedule

The percentage of trips that

incurred a journey or

unloading delay of over half an

hour

Time Utilisation The use of the vehicle

throughout the day:

Running on the road

Break from driving

Loading in the depot

Pre-loaded, awaiting

departure

Significantly delayed

Idle (empty and stationary)

Maintenance or repair

Depots

Light Heavy Mixed Total

No. Depots 7 21 7 35

Vans 8 6 14

Up to 7.5t

GVW17 12 10 39

Up to 18t

GVW31 9 40

Up to 26t

GVW19 15 34

Up to 32t

GVW1 2 3

Total 25 63 42 130

Table 3 Builders Benchmarking Survey Participants


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For the purpose of the KPI survey analysis only

like-for-like fleets are benchmarked with each

other - heavy against heavy, light against light. For

mixed depots, the light and heavy fleets were reported

and analysed separately and are benchmarked only

against the relevant activity, light or heavy.

Thirty-five depots representing a total of 130 vehiclestook part in the survey which averages between three

and four vehicles per site. The survey was

synchronised over a 48-hour period from 07:00 on

Tuesday 7th March 2006 to 07:00 on Thursday 9th

March. Collectively, during the audit period participants

delivered heavy products to the value of 312,594 and

light products worth 402,462. Some 23,120 km were

run over 379 trips and 1,291 deliveries for heavy

depots. Light depots accounted for 10,839 km, 665

deliveries and 99 trips.

The builders merchants trade has a winter off-peak

period when often the poor weather impacts on the

construction industry. March generally represents the

beginning of the trade building up to strong demand

between Easter and the autumn. The survey was

conducted in March to try to reflect an average level of

demand.

Table 4 summarises the additional information collected

about any specialist equipment fitted to participating

vehicles (seven out of eight companies provided data

about vehicle equipment). None were fitted with

satellite navigation equipment. Over half of the rigid

HGVs in the up to 7.5 tonne GVW category were

equipped with tail lifts. Typically for the type of

operations conducted, large rigid trucks were fitted with

lorry-mounted cranes.

Vans up to

3.5t GVW

Rigid up to

7.5t GVW

Rigid up to

18t GVW

Rigid up to

26t GVW

Rigid up to

32t GVW

Total Number of

Vehicles14 39 40 34 3

Air-flow Management Kit

Sat nav Equipment

In-cab Engine

Management Display4 2 5

GPS Tracking

Equipment1 3

Vehicles with Crane

Equipment3 32 22 1

Vehicles with Tail Lift

Equipment 4 20

Table 4 Additional Fleet Information - Vehicle Equipment

See the Freight Best Practice Guides

Truck Specification for Best Operational Efficiency

A step-by-step guide to the process of correctly specifying an efficient and fit for purpose vehicle.

Information Technology for Efficient Road Freight Operations

This guide provides an overview of the available and relevant systems, covering their uses, likely

benefits, issues to consider and associated costs.


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3 Survey Results

3.1 Number of Runs per Day

This simple KPI measures the number of times the

vehicle sets out from the depot with a load. The

relatively small delivery area covered by many

merchants depots means that vehicles can often return

to depot for more than one load per day. Overall

vehicle utilisation can be maximised and fleet size

minimised by ensuring that vehicles undertake second

and third runs during the working day. High customer

service levels can also be offered in terms of same-day

or next-day deliveries. However, a high number of runs

per day must not be taken to mean an efficient

operation if the vehicles are only partly loaded or are

making special one-off trips.

Figure 2a shows that overall for the heavy fleets, the

typical number of runs per day is two. For the light

fleets in the survey (shown in Figure 2b) the average

number of daily runs per vehicle is 1.4, reflecting a

combination, depending on depot, of a higher number

of drops per run and a larger delivery area.

Some of the depots achieving the highest number ofruns per day in the survey are also those that pre-load

vehicles. For example, the highest run rate of 3.2 is

achieved by a depot in the light category that pre-loads

its vehicles for the next mornings work.

For light deliveries there was no difference in runs per

day between vans and 7.5 tonne GVW trucks. For

heavy deliveries, vehicles in the 18 tonne category

actually averaged the highest number of runs per day

at 2.3.

Figure 2a Heavy Deliveries - Runs per Day

Figure 2b Light Deliveries - Runs per Day


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3.2 Number of Drops per Run

The number of drops or deliveries made per run can

depend on several variables including consignment

size, vehicle type, distance between drops and

scheduling practices. In both the light and heavy

delivery fleets, the number of drops per run varied

greatly across the entire survey sample as well asbetween companies own depots (see Figures 3a and

3b).

Not surprisingly, light activities overall averaged a

higher drop rate than the heavy deliveries - 6.7 drops

per run for light goods versus 3.7 for heavy goods.

Interestingly, the two heavy goods depots that show a

drop rate of double the sector average are operating

7.5 tonne GVW vehicles with tail lift equipment. This

suggests good vehicle specification for the tasks being

undertaken which most likely assists in maintaining a

high drop rate.

On average, 7.5 tonne GVW vehicles working on lightdeliveries achieved over nine drops per run, compared

with around five for vans. Commentary on light delivery

activities for lorries and vans is provided in Section 3.4.

Figure 3a Heavy Deliveries - Drops per Run

Figure 3b Light Deliveries - Drops per Run


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3.3 Kilometres per Drop

Overall, the nature of builders merchants activities in

the survey means that, in comparison with many other

transport activities, delivery distances are short. The

regional and local merchants participating in the survey

did not report any drop distances above the sector

average. It can therefore be assumed that their depotdelivery area is similar to those companies operating a

national network of depots.

Figure 4a shows the average distance between

deliveries for heavy activities. When comparing the

heavy drop distances with those of the light activities

(see Figure 4b), it can be seen that the spread is

remarkably similar 5.9 km to 35.5 km for heavy

activities and from 7 km to 35.9 km for vehicles

engaged in light activities.

Depots within the same company can show large

variations in drop distance. Whilst this is most likely a

historical matter of depot location, significant deviationsfrom the sector norm merit investigation in terms of

depot location, delivery area and vehicle routing and

scheduling.

Figure 4a Heavy Deliveries - Km per Drop

Figure 4b Light Deliveries - Km per Drop


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3.4 Number of Drops per Day

Figures 5a and 5b show the total number of deliveries

made per day by vehicles operating from heavy and

light depots. Once again, there is a wide spread of

performance both across the survey sample and

between individual company fleets.

The best in class performers are those making the

highest number of runs per day and the highest

number of deliveries per run. This is often facilitated by

short drop distances. Delivery scheduling and vehicle

routing play a key role in maintaining good

performance in terms of drops per day.

Overall, when investigating the relationship between

vehicle type and drops per day, most vehicle types

show the same performance levels (see Table 5). This

suggests that operators are generally specifyingvehicles correctly for the nature of the activity to be

performed.

The one marked difference is the performance

comparison on light activities between vans and

7.5 tonne GVW trucks.

Here, the vans in the survey averaged six drops per

day, whilst the 7.5 tonne GVW vehicles averaged 11.2

drops.

The average value per drop was also higher for the

7.5 tonne vehicles - 670 in comparison with the

average value for drops by vans of 460. The average

distance between drops was reported as 16.7 km for7.5 tonne GVW vehicles and 19.5 km for vans. The

greater drop rate and shorter drop distance result in a

22% lower fuel use per drop for 7.5 tonne vehicles -

2.7 litres per drop compared with 3.5 litres for vans.

Overall, the cost per drop for 7.5 tonne vehicles

delivering light goods is 16.30, some 38% lower than

the 26.50 cost per drop recorded for van operations.

This again reflects the operational efficiencies and cost

savings achievable where the vehicle is well suited tothe type of work being undertaken.

Issues regarding value per drop and vehicle

specification are further highlighted in Sections 3.5 and

3.9 respectively.

Figure 5b Light Deliveries - Drops per Day

Figure 5a Heavy Deliveries - Drops per Day

11


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3.5 Value per Drop

The invoice value of the goods being delivered per

drop has not typically been used as a benchmarking

KPI for transport activities. Measures related directly to

trucks, such as vehicle fill and running time, have moreusually been adopted. However, the survey participants

adopted this measure as an important business

indicator. Whilst it is not directly an indicator of either

efficiency or profitability, it is a useful starting point to

identify where delivery activity can be of most value to

the creation of profit for the business.

Seven of the eight participants have provided

information on value per drop.

From the data the average invoice value of a heavy

delivery has been identified as 355, and the average

for a light delivery as 720 (see Figures 6a and 6b).

For light activities, the variation in drop value across

the depots is very large from less than 60 to nearly2,000.

The difference in value per drop across the

participating heavy depots is relatively modest. With the

exception of two depots reporting very high values of

over 1,000, values range from 150 to around 540.

A break down by vehicle category of delivery value and

delivery cost is shown in Section 3.8.

Figure 6a Heavy Deliveries - Value per Drop

Figure 6b Light Deliveries - Value per Drop

Activity

Vehicle Category Heavy Light

Up to 3.5t GVW Van 6

Up to 7.5t GVW Rigid 6.2 11.2

Up to 18t GVW Rigid 7.2



Table 5 Drops per Day by Vehicle Category

12


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3.6 Fuel Consumption

Kilometres per Litre of Fuel Used

Fuel consumption, measured in kilometres per litre,

was recorded by vehicle type for each fleet during the

survey period. The results are shown in Figure 7a for

heavy activities and Figure 7b for light activities. Theyprovide an overall fuel consumption figure across all

vehicle types. Table 6 provides a more detailed

breakdown of fuel consumption figures by vehicle

category. It should be noted that good consumption

figures returned by the long wheelbase van and 32

tonne GVW truck categories may not be representative,

as these vehicle types were operated only by two

survey participants and in small numbers.

Fuel Consumption (Km

per Litre)

Vehicle CategoryLight

Depots

Heavy

Depots

Van - Short Wheelbase 5.6

Van - Long Wheelbase 6.4

Up to 7.5t GVW Rigid 5.9 4.7




Table 6 Fuel Consumption by Vehicle Category

Figure 7a Heavy Deliveries - Km per Litre

Figure 7b Light Deliveries - Km per Litre

13


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3.7 Fuel Used per Drop

Measuring fuel consumption alone does not necessarily

provide an accurate measure of overall efficiency or

performance. An operator may show apparently good

fuel performance figures, but the vehicle may only be

partly laden or there may be a large proportion of

empty running. Alternatively, fuel figures may look poorbecause of high use of auxiliary equipment such as

lorry-mounted lifting equipment. What counts more is

the amount of work done for a given amount of fuel.

This KPI measures the amount of fuel used per

delivery made and thus measures not only the energy

input but also the work output. This is termed as

energy intensity.

Average fuel use for heavy activities is 6.4 litres perdrop and this is illustrated in Figure 8a. For light

activities it is 3.5 litres per drop as shown in Figure 8b.

There is a large variance between best in class and

worst in class performance. Even disregarding the

very best and the very worst performers, many depots

are getting three times as much work per litre of fuel in

comparison to what appear to be very similar

operations. Fuel use per drop also varies greatly

across the depots of individual companies within the

survey. For example, one participant used almost two

and a half times as much fuel per drop at one depot

compared to another.

Whilst fuel use has to be monitored closely as part of

the benchmarking process, only half of the participating

depots actually carry this out on an on-going basis.

This compares with over 70% for transport operators in

general. Not surprisingly, those depots that are

monitoring fuel use perform better than those that do

not.

Short journeys, the use of lifting equipment and limited

opportunities for improving fuel use through measures

such as vehicle aerodynamics mean that vehicles

operating in the builders merchants sector are likely to

show a higher than average fuel use. Nevertheless, the

results do show that there is good reason for a number

of operators to investigate the causes of poor fuel

figures at specified depots.

If these causes were understood and appropriate

action taken, significant fuel savings could be made.Initiatives could include management actions, such as

fuel monitoring, and the implementation of a fuel

management programme including driver development.

These actions are explored further in Sections 4 and 5.


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Figure 8a Heavy Deliveries - Litres per Drop

Figure 8b Light Deliveries - Litres per Drop


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3.8 Cost per Drop

The cost per drop or delivery was calculated using the

fixed and variable cost information collected from

survey participants as shown in Table 7.

Figures 9a and 9b show that the cost per drop varies

greatly across both light and heavy depots. Theaverage cost per drop across all vehicle types for

heavy activities is 26 and for light activities it is 24.

Importantly, there is no direct positive correlation

between delivery costs and the value of the

consignment. Indeed, for one depot the two measures

were inversely related - showing a very high delivery

cost and a very low load value.

Detailed company-based investigations will prove

beneficial in helping to determine the profitability of

product lines, delivery activities and locations.

Table 8 shows the cost per drop by vehicle type, and

also compares delivery value.

Figure 9a Heavy Deliveries - Cost per Drop

Fixed Costs Variable Costs

Vehicle

depreciation

Vehicle insurance

MOT

Drivers wages

(drivers wagesinclude employer

costs but NOT

additional costs for

temporary drivers

covering holiday

periods)

Fuel

Vehicle repairs

and maintenance

Tyres

Table 7 Cost Information Collected

Table 8 Cost and Value per Drop by Vehicle Category

Light Depots Heavy Depots

VehicleCategory

Value

per

Drop ()

Cost

per

Drop ()

Value

per

Drop ()

Cost

per

Drop ()

Van - Short

Wheelbase

1,375 18.10

Van - Long

Wheelbase

462.70 34.90

Up to 7.5t

GVW Rigid

1207.7 16.30 458.70 26.70

Up to 18tGVW Rigid 235.90 25.60

Up to 26t

GVW Rigid

297.50 35.90

Up to 32t

GVW Rigid

Not

available31.80

16


20/25

3.9 Percentage of Constrained Loads

In this benchmarking survey, vehicle fill was not

selected as a KPI by the participating fleets. The

diversity in product range, size, weight etc. means that

the precise measurement of load configurations in

terms of weight or cubic capacity is difficult and

ultimately not that important in terms of day-to-day

transport activity.

However, participants recorded instances where loads

could exceed payload capacity, deck length or cubic

capacity. Where this occurs, the load must be split andeither an additional vehicle loaded or a second run

made. Nearly half of the survey depots reported a load

constraint by weight and a third by length and cubic

capacity.

Significantly, five heavy depots belonging to two

different participants reported every trip to be

constrained by weight - one operating vehicles plated

at 12 tonnes GVW, and the other operating 26 tonne

GVW and 32 tonne GVW vehicles.

Load constraints were reported to be less frequent in

the light fleets, although one company noted a problem

with payload capacity.

Whilst local delivery restrictions limiting vehicle size will

ultimately determine the size and capacity of thevehicle selected for a job, it seems clear that there are

instances where the use of vehicles with a higher

payload capacity would lead to fewer trips and greater

efficiency.

3.10 Deviations from Schedule

Survey participants recorded significant delays (of over

30 minutes) affecting deliveries against four possible

reasons:

Own company actions

Problems at delivery point

Traffic congestion

Vehicle breakdown

Of the companies included in the survey, eight heavy

depots and two light depots reported deviations from

their delivery schedule. In total, 7.3% of all trips

surveyed were affected. The main contributor to delays

was problems at the delivery point. Figure 10 shows abreakdown of the contributory causes of the delays.

Two merchants reported depots where 50% of all trips

were subject to delay. Furthermore, one company

reported regular delays at all of its depots.

Figure 9b Light Deliveries - Cost per Drop

Figure 10 Causes of Delays

17


21/2518

3.11 Time Utilisation

During the survey period an hourly audit of vehicle

activity was recorded. This identified what vehicles

were doing at any given time. The activity categories

are:

Running on the road

Break from driving

Loading in the depot

Pre-loaded, awaiting departure

Significantly delayed

Idle (empty and stationary)

Maintenance or repair

Delivery activity in the sector is currently a daytime

activity - out of hours deliveries are rare. Vehicle

activity, in terms of running on the road, is therefore

typically between 05:00 and 17:00.

Figures 11a and 11b show the activity profile of the

heavy and light fleets. It can be seen that vehicles are

idle and unproductive for more than 40% of the time.

This compares favourably with some other

daytime-based vehicle activities such as parcels and

pallet load deliveries, but less well with some retail

fleets where idle time can be as low as 20%, and which

can benefit from out of hours delivery schedules.

Since orders for the next days first deliveries are

generally processed by mid-afternoon, there are

opportunities to pre-load vehicles. This can help to

maximise the working and driving time available,

facilitate second and third run opportunities and

generally increase vehicle productivity. Over 18% of the

heavy fleet in the survey was reported to be pre-loaded

in this way. However, this practice is not adopted

universally across all depots or by some of the survey

participants and therefore could be a good way toincrease productivity.

Figure 11a Time Utilisation for Heavy Activities

Figure 11b Time Utilisation for Light Activities


22/2519

4 Summary

Operational conditions for truck fleets in the builders

merchants sector are clearly different than those for

other sectors of the freight industry. Fleets can be large

but operate in small clusters that are dispersed over a

number of depots, therefore journey distances tend to

be short. There is a strong emphasis on early morningdeliveries and even a tendency to despatch vehicles

partly laden to fulfil a customer order.

Taken collectively, these conditions can inhibit

efficiency and make significant improvements a real

challenge for those in the industry.

Each depot will, of course, have its own conditions and

constraints, and the survey has shown that even within

the same operation, performance across depots varies

greatly. Identifying the variance between depots hasallowed participants to investigate best and less than

best operational practices. Through the individual

survey reports produced for them, many company and

depot specific recommendations have been made and

acted upon.

Correct vehicle specification - payload and auxiliary

loading equipment have been identified in the survey

as critical in ensuring maximum productivity. A number

of the survey participants can most probably benefit

from specifying 26 tonne GVW vehicles instead of 18

tonne GVW vehicles. For some, the potential use of 32

tonne GVW rigids is noted for investigation.

Maximising time running on the road by pre-loading

vehicles is practised by some of the sector. For many,

this pays dividends in terms of the number of deliveries

that can be made in the day and represents good

practice that could be employed on a wider basis.

With relatively low annual vehicle mileage, fuel

consumption has perhaps, traditionally not been a

major focus for depot managers. Significant anomalies

identified at some depots in the survey have warranted

swift investigation. Variations in fuel consumption

between depots show that there are potential benefits

in implementing fuel management programmes.

The industry culture that currently demands an early

morning delivery deadline compresses activity into a

period of peak-hour traffic congestion and can leave

vehicles idle for significant parts of the working day.

Encouraging customers to accept deliveries at other

times of the day will help to maximise vehicle

utilisation, reduce transport costs and avoid deviations

from schedule and delays.

5 The Builders MerchantsTransport Efficiency RoadMap

Based on the findings of the survey, the fold out back

cover of this guide sets out a transport efficiency road

map for builders merchants an action plan ofmeasures that can be considered by anybody in the

sector. It identifies the measures that can be owned

and initiated by those managers responsible for

transport within the business, for example, fuel

management and load preparation. It also shows wider

strategic measures, such as nominated delivery days

for less than full-load consignments. Such measures

would, of course, require the close involvement of other

parts of the business, for example, sales, marketing

and procurement departments.

The action plan is set out under the following six

headings:

Saving Fuel

Equipment and Systems

Developing Skills


Fleet Performance

Supply Chain Reconfiguration

Specific actions are identified under each category,

together with a signpost identifying relevant guidance

and support material available from the Freight Best

Practice programme.


23/25

FleetPerformance

ManagementTool

SUPPLIERGATE

COLLECTIONS/

BACK-LOADING

MakeBack-loadi

ng

WorkforYou

CONSOLIDATION

CENTRES

UNITISATIONOF

CUSTOMERORDER

S

SUPPLIER

DIRECT

DELIVERIES

Increasepre-loadingofvehiclesofnextdaysloadstoensure

maximumproductivedeliverytime.

Preparationbyyardstaffofsecondtriploadswhilstvehicleison

firstrun.

Considerratediscountsforoff-peakdeliveries.

Considerdeliveryoflessthanfullloa

dsonnominateddaysby

geographicalarea.Considerratediscountsforoff-peakdeliveries.

Establishstandardisedcustomerservicelevelsandserve

customerfrommostappropriatedepotforthedeliverysite.

Investigatebenefitsofsupplierdirect

delivery.Establisheconomic

thresholds.

Investigatebenefitsofcollectingsuppliesdirectfromsuppliers

suppliergatepricing.

Reviewopportunitiesforreducingem

ptyrunningbyback-loading.

Reviewindustry-wideopportunitiesfortripreductionthrough

multipleconstructionsitedeliveryconsolidationcentres.

Investigatemarketopportunitiesforf

urtherunitisationofdeliveries

andconsolidationoforders.Forexa

mple:

Brickpackbricks,ceme

nt,plasticiser

Doorpackdoor,hinges

,screws

Plumbpackpipe,joints

,valves

Encouragecustomerstoacceptpre-8amdeliveries,allowing

secondrunloadingduringmorningp

eaktrafficcongestionand

post-peaksecondrun.

Salesstafftoleadcustomerstoava

ilabledeliverytimes.Increase

pre-loadingofvehiclesofnextdaysloadstoensuremaximum

productivedeliverytime.

Establishrelevantkeyperformanceindicatorsandmeasure

performance:

Settargets

Benchmarkacrossdepot

s

Sector Initiative

Supply Chain / Logistics Director

Pe

rformance

Management

Fleet

Pe

rformance

Su

pplyChain

Reconfiguration

INTER-DEPOT

CO-OPERATION

ZONING

PRICING

MECHANISM

DELIVERY

WINDOWS

LOAD

PREPARATION

MONITORING

PERFORMANCE


24/25

TruckSpecification

forBestOperational

Efficiency

DRIVER

DEVELOPMENT

AGuidetoSafe

andFuelEfficient

DrivingforHGVs

ComputerisedVehicle

RoutingandScheduling

(CVRS)forEfficient

Logistics

Fuel

Management

Guide

TelematicsGuide

AppointFuelChampion.

Auditcurrentfuelmanagementproce

sses.

Implementeffectivefuelmanagemen

tprogramme:

Purchasing

Stockcontrol

Dispensing

In-usecontrol

Datacollection

Reviewvehiclespecificationandpotentialbenefitsofthe

introductionofvehicleswithincrease

d:

Payload

Loadbed

Cubiccapacity

Considerfitmentofauxiliaryequipme

nttoreduceunloading

time.

Auditorderprocessing,routingands

chedulingprocess.

Reviewpotentialbenefitsofcompute

risedroutingandscheduling.

Optimisejourneyplanning.

Considerbenefitsofin-cabtelematic

sandcommunications

systemstoenhanceexpectedarrivaltimes,trafficavoidanceand

performancemonitoring.

Conducttrainingreviewaudit.

Implementdriverdevelopmentprogramme.

Considerimplementationofdriverleaguetablesandrewards

scheme.

Trainyardstaffasdriverstoprovide

flexibilityforholidaycoverand

sicknesscover,andreducedepende

ncyonagencystaff.

General

Specific

BuildersM

erchantsTransport

Efficiency

RoadMap

EfficiencyMeasu

resforGeneralCon

sideration

Description

O

wnershiporInitiator

Depot Manager

SavingFuel

E

quipment

an

dSystems

D

eveloping

Skills

MULTI-TASKING

TELEMATICS

ROUTINGAND

SCHEDULING

FUEL

MANAGEMENT

VEHICLE

SPECIFICATION


25/25

November 2006.

Freight Best Practice publications, including those listed below, can be obtained

FREE of charge by calling the Hotline on 0845 877 0 877. Alternatively, they can

be downloaded from the website www.freightbestpractice.org.uk

Saving Fuel

Developing Skills

Equipment and Systems

Operational Efficiency


Public Sector

Fuel Saving Tips

This handy pocket book is ideal for drivers andmanagers looking for simple ways to reduce fuel

consumption.

Expert Advice Helps Cut Fleet Costs

This case study shows the savings achieved byDenholm Industrial Services Ltd as a result of the

measures implemented as part of a site specific

efficiency improvement plan.

Proactive Driver Performance Management

Keeps Fuel Efficiency on Track

This case study shows how Thorntonsimplemented a highly effective driver incentive

scheme combining in-cab driver monitoring,

service delivery levels and accident rates.

Performance Management in Freight

Transport Operations

This guide explains the process of measuringperformance effectively. It includes advice on how

information is best collected and interpreted to

allow informed decision making in order to

achieve operational efficiency improvements.

Information Technology for Efficient Road

Freight Operations

This guide provides an overview of the available

and relevant systems, covering their uses, likely

benefits, issues to consider and associated costs.

Efficient Public Sector Fleet Operations

This guide is aimed at fleet managers in the

public sector to help them improve operational

fleet efficiency.

fbp1049 kpis builders merchants sectorsmmn

Documents