Identifying the gap. Benchmarking to drive better utilization and performance

Transcription

1 Identifying the gap Benchmarking to drive better utilization and performance

2 Summary Benchmarking has been an approach used within businesses for a long time to compare operations and performance, and identify strengths and weaknesses. In this class you ll get a firsthand look at United Rentals industry-first benchmarking service, what the scores mean to your business and how to quickly put them into action. 1. How are the benchmarks developed 2. What do the scores say and metrics indicate 3. Steps to developing an action plan

3 Remember when? The report card The bell curve 3

4 4

5 How about today? Real-time results Progression report card 5

6 Benchmarking defined Comparing one s business processes and performance metrics to industry bests and best practices from other companies. Dimensions typically measured are quality, time and cost. 6

7 Starting from the top GPA: Measure of overall performance 7

8 In the trenches Scores: how well did we perform on individual components 8

9 What impact does performance have on our business? Spend per Category Performance to Peers Spend at Peer Benchmark Potential Savings Impact 9

10 1 Benchmark development

11 Evolution of TC benchmarking PHASE PHASE PHASE Benchmark by customer 20 benchmarks 140 benchmarks Analyze own transactions Analyze equipment category Analyze equipment category and customer segment Deliver analysis in KPI meetings Incorporate in KPI meetings with live stats Incorporate in KPI meetings with live stats Deliver inside Total Control Reporting Deliver inside Total Control Reporting Manual pull of data for customer Manual pull and automated display of data for customer Automated analysis delivered to customer in KPIs

12 Gaps in current benchmark process Feedback Type of work being performed. Electric versus fuel powered machines in same category. Short-term versus long-term rental performance. 12

13 Different jobsites, different utilization Type of work the customer is doing: 8 verticals assigned based on the United Rentals Jobsite Vertical Allocation Model

14 Contract duration impact Duration of the rental: Short term rentals typically are used to tackle specific work on site. Holding equipment long term makes financial and logistical sense in most applications.

15 Same category, different performance Type of equipment being used: Size of the machine has an impact on how much use it sees due to several factors including: cost, scope of work, task dependency

16 Evolution of TC benchmarking PHASE PHASE PHASE PHASE Benchmark by customer 20 benchmarks 140 benchmarks Thousands of benchmarks Analyze own transactions Analyze equipment category Analyze equipment category and customer segment Analyze equipment cat class, duration and type of jobsite Deliver analysis in KPI meetings Incorporate in KPI meetings with live stats Incorporate in KPI meetings with live stats Incorporate in KPI meetings with customized goals Manual pull of data for customer Deliver inside Total Control Reporting Manual pull and automated display of data for customer Deliver inside Total Control Reporting Automated analysis delivered to customer in KPIs Delivery inside TC App, Dashboards, Reporting and Smart Alerts Leverage Enterprise Data Warehouse to automate delivery of KPI

17 Data data everywhere UR GPS Data UR Transactions Customer Data Leased Fleet Owned Fleet Rented Fleet

18 How it works Easy Levers Pilot Projects Smart Alerts Dashboard Single Score Benchmark Service Total Control Desktop Mobile Benchmarking Engine UR GPS Data UR Transactions Customer Data

19 2 Developing an action plan

20 5 criteria that define a project management goal S M A R T SPECIFIC MEASURABLE ATTAINABLE REALISTIC TIME-BOUND Objectives have to be specific and positively described. A goal achievement should be measurable. It should be attractive for the project team to reach the goal. The objective needs to be achievable in a realistic way. The goal has to have a time frame.

21 Plan for success in advance and drive accountability Metrics KPI Outcome Measurable Objective Strategy Task Action 1. What objectives are we influencing 2. How does our strategy impact those outcomes? 3. Who is responsible? 4. When can they take immediate action?

22 Metrics KPI Example action plan Bring Project in on Budget Equipment Budget Rental Consumption Utilization Duration Low Utilization Alert Order On Time Past Due Alerts 22

23 Are we effectively managing the return tail? 23

24 Pop quiz: How many scissor lifts did we really need? Extra Credit Question: How well do you think this customer performs overall? 24

25 Great performance, with opportunity to improve Boom Lifts Welders Scissors In Use In Use Savings? Savings? Savings Opportunity? 25

26 How to get started Setup a Benchmarking Review with your Account Manager Identify an upcoming project and willing leaders Start communicating ahead of time: Project goals Objectives Equipment plan Identify the consumption management strategy Establish cadence for team KPI meetings 26

27 Plan to succeed You must have a game plan. If you aim at nothing, you will hit it every time Dave Ramsey & Zig Ziglar I have a plan of action, but the game is a game of adjustments. Mike Krzyzewski Planning Communicate Agree to KPIs up front Setup TC in advance with: users, alerts, reports Proactively share equipment plan, forecast and changes Agree to cadence around delivery of KPIs Identify areas for improvement and socialize wins and learning

28 Before we jump into case studies, Questions?

29 3 Case study: Executing an action plan

30 Ethylene plant development project Phase I Each subcontractor was responsible for equipment Overcrowded site Multiple sales, delivery and service vehicles Price constancy issues Middle markup Duplicate and underutilized equipment Phase II CM manages equipment Reduce traffic Consistent and accurate billing Middle markup avoided Share equipment across subcontractors Proactive consumption management Quantifiable cost savings in first two months 30

31 Spend and performance Eq. Category Rental Spend 2016 Utilization Project Utilization % to Benchmark Spend at 16 Benchmark Utilization Savings Lifts Boom $200,545 15% 23% 153% $307,502 $106,957 Welders $15,480 75% 57% 76% $11,765 ($3,715) Lifts Scissor $12,736 1% 24% 2,400% $25,472 $12,736 Utility Vehicles $3,158 13% 17% 131% $4,130 $972 Lighting Equipment $3,091 44% 37% 84% $2,599 ($492) Air Compressors $2,020 13% 14% 108% $2,175 $155 Generators $ % 22% 15% $121 ($701) 31

32 Solar Farm Sees The Light 4 x 75 Megawatt Solar Farms Aggressive Time Frame On site tool rooms Weekly Utilization Review Monthly KPI Meetings Forecast Early Return Reccomendations Lead Time and Delivery Service Performance to Benchmark 80% 60% 40% 20% 0% -20% -40% -60% -80% -100% 32

33 Spend and Performance Category Rental Spend Industry Benchmark Project Utilization % to Benchmark Spend at Benchmark Utilization Savings Skid Steers $249,528 27% 59% 217% $499,056 $249,528 Reach Forklifts $224,854 27% 58% 214% $449,708 $224,854 Utility Vehicles $194,334 14% 23% 165% $321,008 $126,674 Excavators $141,968 44% 53% 119% $169,461 $27,493 Dozers $82,380 29% 41% 140% $114,928 $32,548 Wheel Loaders $68,490 32% 29% 89% $60,812 ($7,678) Mini-Excavators $73,098 31% 26% 87% $63,378 ($9,720) Ride-On Rollers $71,603 12% 26% 224% $143,207 $71,603 Rough Terrain Forklifts $15,967 18% 34% 187% $29,862 $13,895 Total $1,122,222 $1,851,420 $729,198 33

34 Plan to succeed, succeed with a plan 34

35 Key takeaways Understand your score Identify areas of focus Start small, fail fast, learn, adjust, grow Implement a S.M.A.R.T. Action Plan

36 Questions?

37 Identifying the gap Benchmarking to drive better utilization and performance