KEY PERFORMANCE INDICATORS, MEASURING WHAT YOU MANAGE, COMMERCIAL COLLECTION.

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The next in the series, “Measuring what you Manage, Key Performance Indicators” deals with Commercial Collection.   As a recap, what is a KPI?  KPI stands for key performance indicator, a quantifiable measure of performance over time for a specific goal. KPIs provide targets for teams to shoot for, milestones to gauge progress, and insights that help people across the organization make better decisions.

As you collect data and analyze the numbers, these numbers will talk to you if you are willing to look and spot the trends that they are showing you.  Now, many of these reports are available from the many software providers serving our industry.  If not a standard report, your provider may be able to design a custom report for you, making this data collection less daunting.

 

COMMERCIAL SERVICE KPI MEASUREMENT

Residential and commercial collection differ in a few but important ways.  While residential waste streams are consistent from customer to customer, commercial collection introduces many variables into the day-to-day operation such as container size, service frequency, distance between stops, material compactability, material density, space constraints for material storage and time of day service requirements.  All these variables influence efficiency, productivity and pricing.

Commercial collection technology varies greatly from urban, suburban and rural areas.  Old cities have particular demands due to lack of space and access for containers of different materials, where suburban communities can better accommodate the extra space needed to store materials for longer periods to provide the optimal collection schedules.  The economies of fewer pickups with larger containers have a significant impact on the cost to the waste generator.

While most people in our industry think front load technology when it comes to commercial collection, the same principles can apply to rear load and side load commercial collection as well.  Many operations have dedicated residential and commercial routes, however in many suburban and rural areas mixed residential and commercial routes exist to be able to collect both residential and commercial customers on the same route with the same truck.   When a particular KPI (Key Performance Indicator) concept is different between the different collection technologies, I will note the differences.  Many KPI’s for commercial collection are the same as for residential collection.

 

Time.   The one thing all of us are given equally is the gift of time.  How we use the time given to us is especially important when running our business.  Week to week and month to month consistency is difficult with commercial routes due to the number of variables (traffic, weather, special pickups, etc.) that change daily, but some trends can be seen while keeping these variables in mind.  Route time, travel time, wait time at disposal sites can, with some effort, be tracked.

Miles.   At its core, the garbage business is a specialized TRANSPORTATION company. Tracking the number of miles traveled during the day has a direct correlation to many other elements you should be tracking such as Operating Cost per Mile,  Miles per Gallon, Average Miles per Hour, Stops per Hour, and others.

Average Miles per Hour.  Dividing the miles driven by the number of hours needed to complete a route.  Not a considerable number by itself, but helpful in identifying trends over a period of time.

Fuel.  Best done if each day starts with a full tank.  Record fuel usage daily.

Miles Per Gallon.   Divide number of miles by gallons of fuel used.  This is a great way to track efficiency of truck and driver’s habits.  Also, a way to check for fuel theft from the truck’s tank.  If MPG shows a drastic decline, either fuel is disappearing or there may be a mechanical issue with the vehicle.

Total yards collected.   This would be the total number of yards collected, not necessarily based on container yards.

Total yards disposed.  Even if you pay disposal fees per ton, recording yards disposed will help you track your trucks compaction ratio.

Total tonnage disposed.   Easily determined by landfill tickets.  Toonage between weeks may or may not be consistent, depending on the specific characteristics of your specific route.

Average tonnage per yard.   Dividing tonnage collected by the number of yards disposed will show total load density.  If day to day tonnage per yard varies greatly, perhaps there are some accounts whose density needs to be reflected in their pricing.  Deciding what accounts are outside the norm may take a little investigative work.   Look at those ethnic restaurants your salesperson picked up cheap!

Stops or yardage per mile.  Dividing the number of stops or yardage by the miles driven is a good measure of the density of your work.  A goal of every waste collection company should be to build and increase customer / route density.  When density increases, its good!  If density decreases, you need to dig deeper, find what’s going on, and correct it as soon as possible!

Software generated reports.   If you are using an industry-specific software program (and why wouldn’t you?)  many come with standard productivity reports that will combine data from your billing, routing and operational data base.  In time, these numbers will begin to talk to you and tell you things about your business you never knew.  You will see trends developing which will make you ask “why?”.   Most software providers will customize a report for you if you know what data you are looking for.

So, if this sounds like a corporate type, make work, terrible waste of time to you, that’s fine.  But then, ask yourself and feel free to tell me in the comments, what are you doing to gauge productivity, hold your team members accountable, and assure yourself that you are running an efficient, profitable company?

vantholenassociates.com

#afriendinthebusiness

Measuring Maintenance Costs

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Measuring Maintenance Costs
When running your business, can we all agree that it’s better to be proactive than reactive? And since we are going to be focusing on measuring maintenance costs, I believe this is one of the most crucial areas of proactivity. “But Ed”, you say, “I just need to get out there and pick up the trash. If the truck breaks, I fix it. What is there to measure?” I’m glad you asked!
Maintenance costs can comprise 15-20% or more of your total operating expenses. In a time of rapid inflation where we are trying to save money anywhere possible, maintenance is an area that can be controlled, if you are willing to take the time to do so. Whether you are using QuickBooks or some other form of software to manage expenses, utilize the categories and track your costs.
Preventative Maintenance is the easiest of categories to manage if you have your equipment on a regular PM schedule. If not, we can help with that too. When performing regular PM services, keep track of the potential problems that you find while underneath greasing the chassis and changing the oil. You may find a brake about to cam over, a hydraulic hose about to burst, broken leaf spring, or a bulge in a tire. These are all things that could result in a roadside breakdown. When you catch them in advance, you have saved yourself untold amounts of time and money. It’s almost like finding $20 bucks in your pocket!
Track all your repairs and why they are being performed, whether they are PM’s, roadside breakdowns, driver inspections or warranty repairs. Once you have done that, you can begin to recognize patterns. For example, if you have a lot of breakdowns on the road, what are they? Tires? Hydraulic lines? Maybe those are some areas that need more attention during a scheduled PM service. Train your techs to look for these things during a service and track that as well. A hydraulic line replaced in the shop during a routine service is like money in the bank compared to having it blow out at the farthest point on the route from the shop!
Now that you have a system in place and can track the patterns, there is a formula we have developed to measure how well the maintenance team is doing. You can compare month to month to track your progress and even use it as an incentive. If you would like more information on this system, message me or give me a call! I would enjoy talking with you and getting to know you and your business.
Ed Dryfhout
Van Tholen & Associates
ed@vantholenassociates.com
616-813-6600
vantholenassociates.com
616-813-1657

VENDOR RELATIONSHIPS

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Vendors, whether repair shops or parts suppliers, might be the difference between getting the route done that day or not. In the picture above, I was able to get back on the road and finish the route thanks to my awesome welder and wrecker companies.

Have you ever wondered why it seems like your equipment is always the last to get worked on when you drop it off at your local repair shop? Does it seem like you are not getting the best prices on your parts? Let’s talk about vendor relationships.

First off, notice I say “relationships.”  These are important people in the life of your business and should be treated as such. Imagine how your spouse or significant other would react if you only paid attention to them the moment you needed something and demanded action immediately.  Hmm, hits kind of close to home.  Hold one moment while I go order my wife some flowers… I’m back.

So how do you build a healthy relationship with your vendors?  Well, just like any other relationship, you spend time getting to know them.  Stop in at the repair shop or dealership where you want to send your equipment or already are and talk with the service manager and techs out on the floor if possible.  Get to know them and their flow of work. Bring doughnuts once in a while just for the fun of it.  That will go a long way to endearing you when you need them.  When a truck with a particularly difficult issue is resolved, have a gift card ready for the tech, if that is acceptable with the shop management, and personally thank them.  Talk with them about how they resolved the problem, and it can save you costly downtime in the future.  Most importantly, don’t “cry wolf” every time you bring in a truck.  What I mean by that is if it is not an absolute emergency, don’t portray that to the service manager.  When it is, then let them know.  If you work with them, they will work better with you.  It’s the give and take of any relationship.

When it comes to parts suppliers, the same principles apply.  Talk with them about your most common parts and how best to keep them stocked.  Work with them on how best to find the parts that are in short supply.  If you have a primary source for your heavy-duty supplies, don’t drop them if a competitor comes in a couple dollars cheaper.  Be open and honest with alternative quotes.  Present them in a non-threating way and let them know you have options and ask if they can match competitors’ prices.  I have found the most surprising discounts come when you simply ask.  That can also save you from distancing yourself from a preferred vendor over a few dollars.

So do yourself and your company a favor and spend some time building relationships, both on the job and off.  We all need each other!

If you would like more information, please contact us at:

Van Tholen & Associates

Ed Dryfhout

ed@vantholenassociates.com

616-813-6600

 

vantholenassociates.com

616-813-1657

CRAZY TIMES IN VEGAS, BABY!

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WasteExpo is happening next week in Las Vegas, NV.   This annual gathering of waste professionals from across the world always provides a great time to get away and get a new perspective on our industry.

But many will say their biggest purpose in going to Vegas is the partying.  After all, “What Happens in Vegas, stays in Vegas”, right?   While having fun is certainly important, the value you go home with is much greater than winning (?) at the craps table.

I attended my first WasteExpo in 1968 (I was very young), and I still walk around the show floor in amazement at the shiny trucks like I did so long ago.   But, I now have a whole different perspective when I realize the cost of these glittering works of art, and the complexity involved in getting materials picked up at the curb and recycled, landfilled or incinerated.

Besides the lights, the give-aways, the food and drink, here are few things to consider as you spend time at WasteExpo:

Visit with vendors. An obvious one. Ask questions. Open your mind to new ways of doing things.  Don’t be blindly loyal to just one make or model of truck, compactor or container, but weigh carefully the advantages offered by the alternatives.

Visit the big company’s booths.  Talk to them, ask questions, get some insight in the way they do business.  Who knows, you may get invited to their private parties!  I remember seeing the Doobie Brothers and REO Speedwagon at WasteExpo in years past!

Visit with old friends.  Look for the folks you’ve passed along the way  in your career.  See what they are up to.  Grab a drink and learn something new.  Seek out your competitors and get to know them on an entirely different level.  Today’s competitors can become tomorrow’s friends!

Make new friends.  Don’t be bashful!  Introduce yourself to people looking at the same products you are.  Ask questions about their business, you may find some great ideas from someone across the state or across the country facing the same challenges you are.

Take in a conference session or two, or ten!   It may be hard to sit inside a building all day while its sunny and warm outside, learning about the latest trends in the industry, the newest technology, the best way to manage employees, these are all topics you will hear discussed.  Get the most of your investment by hearing from some of the best minds in the industry.

So, if you come for the gambling, OK.  But you can leave a winner if you have a plan and organize your time and attend WasteExpo in an intentional manner.  And make sure, What Happens in Vegas DOESN’T Stay in Vegas!  Bring home some solid ideas to improve your business!

 

Insurance Broke?

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We have all heard the term, “Insurance Broke.” But have you ever heard of anyone going “broke” due to not having the right insurance? Today, we are going to look at required and recommended insurance coverage. Each state may have particular requirements or regulations, so always speak with an insurance professional well versed in your state’s insurance rules before making any insurance decisions.
INSURANCE COVERAGE THAT IS NECESSARY IN THE WASTE INDUSTRY
• Business Auto, coverage to protect you and your employees driving company owned vehicles, covering bodily injury and liability, property damage and other risks associated with operating vehicles in your business. EXAMPLE: Your driver cuts a corner short and damages a customer’s building and landscaping. This coverage pays for the damage to be repaired.
• General Liability protects you company if your business is involved in bodily injury or property damage. This coverage is often part of a larger “Commercial Package.” EXAMPLE: A customer slips and falls in your parking lot and receives a concussion. This coverage will pay the medical bills and defend your company in a lawsuit.
• Worker’s Compensation, pays medical expenses of employees injured on the job, replaces most of lost wages due to a work-related injury, and provides life insurance benefits after an on-the-job loss of life. Workers Compensation also covers ongoing care such as physical therapy. EXAMPLE: Your driver gets his arm caught in the hopper of your truck and requires extensive surgery. This coverage will pay the medical bills and provide compensation to the driver while he is off work.
• Inland Marine, many times a part of a larger commercial package, provides coverage for equipment that is transported over land, or is at a location other than your address. In the waste industry this would apply mostly to carts, containers, compactors, and other equipment installed at a customer’s location. EXAMPLE: a rolloff container at a remote location catches fire and the paint is burned off and the walls warped. This coverage will cover the cost of needed repairs to the container.
INSURANCE COVERAGE STRONGLY RECOMMENDED IN THE WASTE INDUSTRY
• Business interruption. Will pay the extraordinary expenses to continue operations in the event of a loss which otherwise will cause interruption for the operation. This could be part of a larger “Commercial Package.” EXAMPLE: A worldwide pandemic occurs and your whole staff is out sick. This coverage would cover the loss of income incurred due to the inability to perform services for your customers.
• Umbrella Coverage extends the coverage limits for many liability policies. Umbrella Coverage is often required under certain commercial, industrial, and municipal contracts.
• Pollution Liability, also commonly referred to as environmental insurance, helps protect businesses from unexpected pollution exposures that may not be covered by standard casualty and property policies. In the Waste Industry, Pollution Liability Insurance can be important in the event of a diesel, hydraulic oil or other leakage that can potentially cause an environmental cleanup. EXAMPLE: One of your trucks has a leaking hydraulic hose and sprays several lawns in a high-end HOA. This policy would pay for the cleanup and the replacement of the damaged lawns.
• Cyber Coverage, Protection for liability if confidential information is stolen via an intrusion into your computer network.
• Key Employee. Covers the loss experienced by the company in the unexpected death of a key employee who may be difficult or expensive to replace. EXAMPLE: your lead mechanic dies, and you now need to out-source equipment repairs until a replacement is found. Proceeds from this policy could be used to pay the additional expense of the outsourcing.
• Buy – Sell agreements funded by life insurance. This coverage enables shareholders to pay the survivors of a shareholder who has died for their portion of the business.
• Employment Practices Liability. Protect the company from inappropriate conduct, misrepresentations, or dishonesty on the part of an employee. EXAMPLE: An employee flirts with a customer’s employee and you are sued for harassment. This coverage would cover your expenses to defend this case and pay any damages.
• Employee Benefits Liability. Covers the company’s expenses in the event of an error in administering employee benefits. EXAMPLE: When a new employee was hired, a health insurance application was lost, and they were never properly enrolled. This policy would cover your expenses in covering any health expenses this employee had while he was not covered when he should have been.
• Employee Dishonesty. Protects the company from loss due to the dishonest of an employee. EXAMPLE: an employee services customers using your equipment and pockets the money. Once caught and prosecuted, this coverage would compensate for the loss the company incurred from providing the work and not seeing the income from that work.
SPECIAL COVERAGE
• Bid Bond. Often required by municipalities, a Bid Bond is a guarantee that a bid that is provided by a contractor is a serious bid. If a company is awarded a bid but fails to fulfill the terms of the bid and commence certain activities by a certain date, the bond holder (the municipality) can collect on the bond to cover expenses incurred due to the inability of the contractor to meet its bid commitment.
• Performance Bond, Often required as part of a municipal bid, a Performance Bond is a policy the contractor will provide to the municipality which will pay the city’s expenses if the contractor defaults on the terms of the contract.
So, insurance is a major expense if you want to conduct you business at the highest level of quality and professionalism. Do not get caught short. Having the wrong coverage or being under protected can cost thousands and thousands of dollars, or even your entire business. As a company grows, the risks only get greater. Do yourself a favor and review your coverage with an insurance professional soon and make sure you are adequately covered.
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What does the trash business and the Russian army have in common?

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There are many similarities between business and the military and war. One of the great business and leadership books is “The Art of War” by Sun Tzu. Terms like strategic and tactical planning, chain of command and the emphasis on training are interchangeable between business and the military objectives.
This article in the link below from CNN is a great story about how neglected maintenance affected the Russian army’s advance into Ukraine.
What lessons can we learn from this article?
Ed Dryfhout ed@vantholenassociates.com

Brushing teeth and fixing trucks?

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The Importance of Preventative Maintenance
Let me ask you a question. Do you brush your teeth? Most people do on a fairly regular basis, but why? You don’t go to the dentist and find out you have 3 cavities only to go home and brush frantically in hopes of making them go away. By then, the damage is done. You brush your teeth 2-3 times per day to PREVENT the cavities.
The same goes for preventative maintenance on your equipment. Your equipment, like your teeth, are some of the most valuable assets you have. To lose them (your teeth or equipment) would be devastating. So, what are some things you can do to be proactive in your maintenance? Let’s take a look.
Our last 2 posts talked about pre and post trip inspections. That’s where you catch the immediate problems that may become bigger problems. If you aren’t engaging in this practice, start right away.
One of the most important things you can do as the person responsible for such precious assets is initiate a preventative maintenance schedule. There are software programs that can automate things for you and track service items, labor hours, parts costs etc. In future posts, we’ll talk about how you can actually measure and manage these things. (Imagine that!) Remember the phrase, “If you can’t measure it, you can’t manage it.” If you are just starting out and maybe don’t have the budget for that yet, start with old fashioned paper or white board and markers. Look in your owner’s manual to find service intervals specific to your equipment and set up the schedules for those items. Some are tracked by hours, others track by miles. If you have implemented the pre and post trip inspections and your operators are handing in their inspection sheets daily, then you can track the hours and miles and set up the time when you will service your equipment.
Follow your service manual to determine what needs to be done at different intervals. For example, you need to grease things like cart tippers, automated arms and packer blades often. Oil changes and other items are less frequent and won’t be done at every service. The main things you want to be paying attention to at these services are tires, fluids, hoses, brakes, lights, belts and high wear items like floors and hoppers. These are the things that will cost you precious time out on the road if not addressed at the shop. A blown tire, ruptured hydraulic hose, or an out of service violation from a DOT officer for bad brakes will cost you hours and precious dollars.
There’s a lot to unpack here so in the coming weeks we will brake (see what I did there?) it down even further and get into the nitty gritty of what to be on the lookout for when you’re crawling under, around and on top of your equipment. Until next time, don’t forget to brush!
Ed Dryfhout
ed@vantholenassociates.com

Van Tholen and Associates
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Pre-Trip Inspections, Continued…

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Last time, we talked about the importance of pre-trip inspections.  I hope you gave some thought to the idea and that in addition to it being required, it’s also just good business. I know it seems like extra time in the morning but it really can save you hours down the road.

 

So, you’ve decided you’re going to take the leap and start disciplining yourself and the rest of your team members to do the same. What are the things you need to have on board while doing your pre-trip inspection?

 

First of all you need a good pre-trip inspection booklet. You can find these on various websites like JJ Keller, who has inspection booklets designed specifically for refuse trucks. They will have carbon copies so that one copy will stay with the booklet in the truck and the other copy can be handed in after the post trip inspection. We’ll talk about that soon as well!

 

Last time we talked about inspecting tires, lights, hoses and belts. I also want to touch on some important safety items. You need to have an approved type ABC fire extinguisher on board that is fully charged and has been Inspected by a certified fire professional in the last year. If you have never experienced a fire on your truck, good for you! It can be a devastating event to your business.

 

You will also want to have a set of three DOT approved triangle reflectors. Any local truck dealer or heavy duty parts shop should have these. In the event of a breakdown, you will need to have these on board so you can display them facing oncoming traffic.

 

The next thing you will need to make sure of is that your license plate registration is up-to-date along with your insurance certificate. Check the dates on the paperwork on board to make sure they are current. This is the first thing a motor carrier officer will ask for.

 

The officer will also ask to see the paperwork on your annual DOT inspection. This inspection needs to be performed by a licensed heavy duty mechanic. It will include a check sheet of all of the FMVSS (federal motor vehicle safety standards)items that were inspected. Also, an annual DOT inspection sticker needs to be posted in a conspicuous area on the cab of the truck.

 

If you don’t have maintenance software that logs the renewal information, make sure you come up with a system for reminding yourself to have this done. It can be as simple as a Google calendar reminder 2 to 3 weeks prior to the expiration date.

 

I hope this helps to give you a framework of what you need for a good foundation for a pre-trip inspection program. If you’d like to talk more, please contact us at vantholenassociates.com.  I look forward to helping you!

 

Ed Dryfhout

ed@vantholenassociates.com

#afriendinthebusiness

The Importance of Pre-Trip Inspections

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It’s 5 a.m., it’s 35 degrees and raining pretty hard.  Somebody just called in sick and so that’s one extra route to try to cover.  You better hit the road quick, right?  You looked over the truck as you were walking into the shop last night and everything seemed alright so it’s probably not worth taking the time now when you need to hit the road, right?

Beside the fact that pre trip inspections are a federally mandated regulation and there should be an inspection booklet on board and properly filled out, it’s just good practice.  So much can happen in between shifts.  Sometimes you may think gremlins have been active all night, letting air out of tires, severing wires to lights or rubbing hydraulic hoses together to the point where they will burst on the 3rd stop of the day.

It may seem like one more thing that will take time away from getting your customers picked up and getting done for the day but think about the potential downtime.  How long will you wait for a tire vendor or mobile repair service to show up at the farthest point from your shop and get you going again, an hour, maybe more?  5 -10 minutes in the morning can save you hours during the day.

Pre-inspection booklets should be kept in the truck and filled out after an inspection before leaving the yard.  The main things to look for are tire condition, operation of all lights, brakes, fluids, hoses, listen for air leaks and general operation. And don’t forget to look on the ground for fuel, coolant or oil leaks.  While the cart tipper functionality is not something a motor carrier officer will be looking at on a roadside stop, it is something that could cost you hours during the day but 5 minutes to fix before you take off.

Speaking of roadside stop, are you ready for that if it occurs?  If you haven’t filled out the pre-trip inspection, or don’t have it on board, there’s your first violation.  The day only gets longer form there.  Should that trigger a DOT audit, your week and month may get even longer.  A good friend of mine experienced such an audit.  The officer took an entire day calculating the fines.

So, before you leave, is it really worth skipping the pre-trip? If you need help setting up a pre-trip inspection policy, let us know, we’d be glad to help!

Ed Dryfhout

ed@vantholenassociates.com

#afriendinthebusiness

Vantholenassociates.com

Who are the “Associates”?

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I’m often asked, “who are the ‘Associates’ at Van Tholen & Associates?”  Let me introduce you to our leading “Associate”.

Ed Dryfhout and I were co-owners in a waste collection company for 17 years.  It was a great partnership, where Ed managed our fleet, and I managed sales and administration, and together with a remarkable staff, we shared responsibility in leadership and managing the day-to-day operations.

In Ed’s role as Fleet Manager, he spec’d our trucks and containers, managed maintenance and repair of our fleet, rebuilt collection vehicles, initiated our tire management program and undertook initiatives in the areas of safety, productivity and leadership that contributed to our company’s growth and health.

Now, he serves our clients with the knowledge and experience based on over 30 years in the waste industry.  From designing maintenance programs to making recommendations on products, services and procedures, Ed can help keep your fleet running reliably and effectively.

If you are faced with tough decisions regarding buying, selling or operating your equipment, Ed is here ready and willing to help, bringing you value by helping to manage your fleet better.  Reach out to us at Van Tholen & Associates to speak to Ed if you need to discuss improvements to your fleet management!  Call today at 616-813-1657 or fill out the contact form at vantholenassociates.com.