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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
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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
Up to 26t GVW Rigid 6.5
Up to 32t GVW Rigid 7.2
Table 5 Drops per Day by Vehicle Category
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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
Up to 18t GVW Rigid 3.3
Up to 26t GVW Rigid 2.2
Up to 32t GVW Rigid 2.5
Table 6 Fuel Consumption by Vehicle Category
Figure 7a Heavy Deliveries - Km per Litre
Figure 7b Light Deliveries - Km per Litre
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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
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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
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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
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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
Performance Management
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.
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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
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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
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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
Performance Management
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.