Project: Key Performance Indicators for Home Delivery Operations

Reference:

Last update: 02/09/2003 16:02:32

Objectives

The aim of the project is to highlight the potential for efficiency improvements for home delivery operations by developing and measuring KPIs. Substantial reductions in energy use can be achieved by making better use of vehicle capacity, resulting in less pollution, fewer accidents, less congestion and, of course, lower operating costs. Data will be collected from a range of different competing companies to benchmark their relative performances.

Description

Initially three sectors of home delivery will be investigated - parcels, grocery and large items.

It is Government policy to encourage best practice within the road haulage industry for driver training, vehicle maintenance and efficient operations. Since 1998 the DTLR has funded work to develop and establish KPIs in individual distribution sectors, including food, automotive, non-food retail and the road leg of air cargo.

Contractor(s)

AEA Technology Environment
Harwell Business Centre, Didcot, Oxfordshire, OX11 0QJ
+44 (0)1235 432201

University of Westminster
Transport Studies Group, 35 Marylebone Road, London, NW1 5LS
+44 (0)20 7911 5073

Transport and Travel Research Ltd (Oxon)
30 High Street, Woodstock, Oxfordshire, OX20 1TG

Freight Transport Association
Hermes House, St John's Road, Tunbridge Wells, Kent, TN4 9UZ

Contract details

Cost to the Department: £37,514.00

Actual start date: 01 December 2001

Actual completion date: 01 January 2003

Publication(s)

Development and Application of Key Performance Indicators for Retail Home Delivery Operations Phase One
Author: Freight Transport Association, University of Westminster and Transport and Travel Research Ltd
Publication date: 01/01/2003
£0.00
Source: TransportEnergy Best Practice
More information: http://www.transportenergy.org.uk/downloads/HomeDeliveryKPI.pdf

Summary of results

  1. Many of the companies that have co-operated in Phase One of the project use internal measures to
    benchmark between their depots (and even drivers within the depots), and so recognise the value that
    such measures can have in terms of improving competitive performance. The result of this has been
    that the activities carried out during Phase One have generated a high level of industry support and
    involvement. There is also a clear interest among many companies involved in home deliveries to
    discuss their thoughts and experiences. In addition, some companies are keen to combine these
    discussions with a KPI survey as a means by which to improve knowledge and inform future transport
    policy. Phase One has also helped to demonstrate that the classification of home deliveries into three
    distinct sectors, namely parcels, grocery and large items, is practical and supported by companies
    working in these sectors.
    Assessment of the feasibility of the KPI home delivery project has involved consideration of the
    following issues:
    . The relevance of KPIs used in other TransportEnergy Best Practice KPI surveys to home delivery
    companies;
    . The relevance to TransportEnergy Best Practice of the KPIs that companies have shown interest
    in;
    . Identification of suitable KPIs for the home delivery market that meet TransportEnergy Best
    Practice and company requirements;
    . Companies' willingness to collect new data for a KPI survey (and the scale of data collection
    necessary);
    . Whether existing company data could potentially be used for a KPI survey;
    . The attractiveness of a KPI survey to the three sectors of the home delivery market and the
    potential number of companies that might participate in the survey;
    . The interest in, and relevance of, a home delivery KPI survey to other companies and
    organisations beyond the participating companies.
    However, Phase One of the project has identified several fundamental concerns with a home delivery
    KPI survey:
    . While there has been a high level of interest among companies contacted to discuss their home
    delivery activities, there is less interest among companies for a KPI survey.
    . The different levels at which companies with suitable data (for a home delivery KPI survey)
    collect their data raises concerns about how meaningful the results of the KPI survey would be,
    and how useful the results would be to the companies taking part.
    . The home delivery KPI survey would be unlike previous TransportEnergy Best Practice KPI
    surveys in terms of: (i) the data collection technique (with companies having to supply existing
    data as the multi-leg nature of home delivery operations would make it too onerous for companies
    to gather the data from scratch), and (ii) the KPIs that would be calculated. The results would not
    therefore be directly comparable with other TransportEnergy Best Practice KPI surveys.
    . The approach needed to collect data in a home delivery KPI survey would require significant data
    handling and data manipulation efforts for each participating company's data. The scale of these
    efforts are currently unclear but are likely to be significant, and would have cost implications for
    Phase Two of the project. This approach to data collection and analysis would be likely to affect
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    the repeatability of the survey, especially if companies were required to meet the costs of data
    handling and manipulation in subsequent surveys.
    . Some companies that are keen to participate in a survey either: (i) do not currently collect the
    necessary data, or (ii) perform home deliveries together with deliveries to businesses, and cannot
    separate this data. None of these companies could therefore participate in the survey.
    . The survey is unlikely to have a large audience beyond the participants. This is due to: (i) the
    relatively small number of companies that are involved in home delivery operations on a large
    geographical scale, and (ii) the lack of similarity between home delivery operations and other
    types of distribution operations.
    . Achieving the required sample size for the KPI survey is likely to prove difficult, especially in the
    grocery and parcels sectors. Also, key participants with substantial market share have either
    formally withdrawn from the project or provided negligible input to Phase One. The omission of
    these major players would diminish the value of a KPI survey.