GTPC Measuring Transportation Performance - PowerPoint Presentation

GTPCMeasuring Transportation Performance 1 October 8, 2015 Rebecca Silver Branch Chief, Center for Transportation Management With support from Vector Consulting

Why Measure Performance? 2 Customer Looking to reduce costsProactively manage Freight Financial and operational risksLooking for ReliabilitySimplify Operations TSPLooking for volumesImprove marginsImprove capacity utilizationPlan for economic uncertainty BenefitsImprove reliabilityReduce CostsImprove Collaboration CollaborationKnow your customerKnow your TSPsManage ExpectationsManage Performance

KPI Performance Measurement in Transportation 3 “KPIs are as good as the underlying quality of data and the simplicity of processes in collection and interpretation” Collection Identification Compliance Interpretation

Transportation Landscape in the Federal Gov. Fragmented Spend across AgenciesShipping Freight All Kind (FAK), HAZMATModes include Ocean, Air, Road and Rail Collective Significant Spend ($3B - $8B) Unable to leverage economies of scale, No ConsolidationKPIs exist in silos, embedded in contracts, tenders etc.Data collection and aggregation continues to be a challengeVaried level of automation and technologies: High end COTS to paper basedSome agencies such as DoD & FEMA have implemented carrier KPIsIndustry is subjected to different levels and methods of measurement4 There is a need for a universal set of KPIs and a policy supporting them to help Government and Industry speak the same language and improve efficiencies in Transportation

US Government FY15 Transportation Spend 5 Source: USASpending.gov; Includes DoD The Spend justifies leveraging economies of scale and having a uniform set of policies and procedures for performance measurement

GSA OGP-CTM Collaboration OGP and CTM collaborating on identification of KPIsCTM shared GSA’s experiences on KPIsProvided the realm of possibilities from COTS based TMS Identified an initial set of KPIs under three groups 6 Compliance Timely Reporting SmartWay EnrollementSocio-Economic Indicator Sustainability FactorCostAccessorial-Total Freight Spend Ratio Capacity UtilizationClaims-Spend Ratio Consolidation Factor  Distance by Mode  Modal Shift Factor  Spend by Low Cost Mode  Cost/mile  Quality Authorized-Billed Cost Variance  Billing Accuracy  Damage Ratio  Equipment Availability  On Time Delivery  On Time Pickup  Work in Progress Preferred Outcome Identification of a small set of high impact KPIs Universal definition and interpretation Ease of data collection Can be implemented in a simple manner High Compliance rate due to low burden on TSPs reporting Quality of data paramount to ensure the KPIs are meaningful and prevent disputes

Developing a Common Framework for KPIs 7 Success lies in working out the details A detailed policy is required on the identified set of KPIs to ensure a common understanding and interpretation Action and Remediation Penalties for non performers Escalation and dispute rules; Reinstatement Rules Identify performance gaps and refine TSP engagement strategy etc… Collection & Aggregation Behavioral change such as Shipper logging actual times; Frequency of data capture, analysis , assessment, presentation and retention etc… Identification & Definition Identification of KPIs that will yield results and can be supported by reliable data; What constitutes accurate Information; Segregation of Duties: TSPs should not be entering data that cannot be validated independently; Defining Business rules for unplanned scenarios such as change in estimated times, diversions etc.; Decision rules for situations where data is unavailable or partial etc…

KPIs in GSA’s Transportation Program The STOS contains parameters and requirements for TSP performanceThe GSA TMS (TPI) has the capability to support a range of KPIsFEMA is collaborating with GSA and implemented a few KPIsGSA prototyped a model known as “Value Index” that takes into account Cost and KPIs to rank carriers in real-time (can be taken further, subject to funding) Success of Value Index relies on shipment execution in a centralized system Data continues to be a challenge where GSA customers execute in other internal systems or 3rd partiesPlan to introduce additional modes such as Air with relevant KPIs8

Commonly Used KPIs : On Time Pickup 9 Commonly Used Requires accurate date capture Plan for deviations from estimated times Be clear on the conditions under which a carrier will be penalized Determine frequency for aggregation

Commonly Used KPIs : On Time Delivery 10 Commonly Used Requires accurate date capture Should be captured by Shipper Plan for deviations from estimated times Be clear on the conditions under which a carrier will be penalizedDetermine frequency for aggregation

Commonly Used KPIs: Tender Responses 11 Insufficient Lead time No Equipment No Drivers Available Price Not Acceptable Rejected Commonly UsedImportant KPI and can be enforced easilyDetermine frequency for aggregation

Performance Trends (Time) 12 Insights into trends is essential Helps define aggregation Helps introduce balance in defining KPIs

Sample Advanced KPIs 13 Capacity Utilization Planned vs. Actual Expense Sample advance KPIs Most advanced TMS provide out-of-the-boxUseful for high volume shipping, Government owned Assets

Conclusion 14 In Summary Federal Transportation spend is large enough to derive economies of scale A universal set of KPIs can help define a common speak across agencies and for the industryA uniform policy can help ensure consistency in measurementThe KPIs should be simple, manageable and implementable in a diverse range of agencies with varies skill sets and level of automationIndustry is conversant with KPIs in the commercial sector and will welcome this changeIdentifying a common platform for data aggregation across the government Proper planning an implementation will yield costs savings and lower risks