Step-by-step guide to performance benchmarking
Benchmarking is a way to evaluate whether you are achieving the best possible performance in your fleet operation. You can set internal benchmarks that measure your performance against pre-set goals, see how you stack up to a competitor’s benchmarks, or even determine how you measure up to industry standards.
To execute a successful benchmarking program you need to follow an orderly process. Here are key steps you need to follow.
- Review your operation: Before you can set up to benchmark against any standard, bit it published industry norms or the competition, you need to fully understand every element of your cost structure and what the “drivers” are.
- Document the objectives and the scope of project: Decide exactly what you want to benchmark. Is it your total operation or just a specific area like the service shop or even something more finite like asset utilization,, asset performance, rates, etc.? Obviously the broader the scope of the project the more things you will have to monitor.
- Review and document your processes: Once you have decided which area(s) you want to benchmark, you need to spend time thoroughly examining your current practices, processes and performance in that area. You need to have a starting point for improvement.
- Agree on metrics: Once you know where you are and what you want to improve upon, define how you will measure improvements. The more concrete the measurement, the better.
- Develop a data collection plan: Decide how you are going to gather the data needed to measure your progress toward the benchmark. Do you need to make investments in technology to allow for proper data collection? Do people need to be assigned the task of collecting and interpreting the data?
- Develop an implementation plan: Determine the steps you need to take to reach the benchmarks you have set. What changes do you need to make in technology, equipment, and personnel in order to make your plan a reality?
- Get buy-in from your staff: Make sure everyone is on board to ensure that goals are met. Explain what you are trying to achieve and why. Let your staff know that they are instrumental to achieving your benchmarks.
- Update and recalibrate: Once you consistently reach your benchmarks, consider modifying or updating them for continuous improvement in your operation.
Various industry groups provide benchmarking data and opportunities to participate in studies that they conduct usually on an annual basis. The old adage, “if you want to improve something you have to measure it,” could not be truer. Before you embark on a benchmarking process, you must understand your cost structure.
Benchmarking is a great way for you to evaluate how your operation is performing compared to best practices and it doesn‘t matter whether you choose to benchmark against yourself, your competitors or the industry. Benchmarking leads to improvements no matter what scale you use to measure.