Key Performance Indicators
Key Performance Indicators for Cost Control, Employee Motivation, and Happy Customers
As a facility maintenance company, it's very important for us to track not only our revenue and profit, but also to monitor and collect data regarding work orders, work hours, and other key performance indicators (KPIs) that reflect the workload and productivity of our technicians. But more than just numbers in a report, we wanted these metrics to continually work for us—for our management team, for our service techs, and for our customers—to make us a better company. With a little help from our best customers and some technical programming wizardry, we have been able to accomplish just that.
|Account for Exceptions
Of course, not all work orders are equal. A 'typical' work order would be a two-to-three hour repair requiring minimal materials. The average cost of a 2011 repair work order, as of this writing, is $237. Yet all techs, from time-to-time, perform 'bid and agreed upon' fixed price work orders involving subcontracted work that can exceed a thousand dollars. These work orders create temporary spikes, but over time will average themselves out.
Due to the costs of travel, our business model is based upon locally based employee techs serving as small a service area as possible. But just as all work orders are not alike, all territories vary in size and retailer density. Therefore, one tech's data may not be directly comparable to another's. Nevertheless, just as MLB hitters accumulate career batting averages for comparison to the current season, each technician accumulates his own career stats. These comparisons help management recognize each tech's performance so as to be able to aid in development and to recognize and reward increased productivity.
Management Use of KPIs
As in any business, we began by tracking revenue and profit, and performing routine monthly good accounting practices. But as we grew and added more technicians, we needed to monitor their workload and productivity so we could more efficiently distribute the workload, as well as see who our best performing / least effective techs were.
The one page Microsoft Excel report we developed, and still continue to use, tracks weekly number of work orders completed, and the corresponding revenue of those work orders per tech, and for the total team. In order to gain insight into these results, and to provide insight into variations in both number of work orders completed and corresponding revenue, we track number of work hours available (40 hrs/week less holiday and vacation) and actual work hours.
This one page report contains data for an entire quarter along with summary data from the prior three quarters. Average cost / work order allows us to see very grossly our relative cost effectiveness compared to prior quarters.
Client Use of KPIs
Measuring and recording these various metrics proved beneficial when it came to reporting to our clients. One major retail client was particularly impressed with our system and metrics, but in a semi-annual business review meeting we learned the KPIs which we had been tracking were not the only KPIs upon which this retailer was going to evaluate us. In addition to average repair cost, the most important metric they use is percent of work orders completed on-time with a clearly defined threshold of acceptability. Our system did not statistically track that metric. Not wanting to be blindsided by key data at review time, we integrated this new metric into the data collected and analyzed, making for more thorough and useful reports for all our customers.
|Caution: Understand What You Are Measuring
One thing we were especially careful of in determining which key performance indicators to track was to eliminate items that were more subjective in nature. While these things can be very important, too often performance reviews are based upon subjective feelings or skills unrelated to the actual performance of the work. In his book Customers for Life, Carl Sewell cites a great example from his experience in his car dealerships. His mechanics were required to explain the car repairs they had performed to the customers. Customer evaluations of the mechanics scored many of his best mechanics very low. Upon analysis, Sewell's team concluded that since the customers in most cases could not see the repairs, what they were actually rating was the mechanic's ability to relate to the customers and explain the work--communication skills. So it's critical that evaluations are clean of disparate influences.
Team and Individual Use
In addition to wanting to evaluate performance, inherent in our system design is the desire to share the data, both good and bad, with each tech and as a team in order to positively change behavior. That is, the information can be much more effectively used when it is known by those upon whose performance it is based.
During this same time period the number of work orders we were receiving was increasing dramatically. Received primarily via e-mail, just the act of opening, acknowledging and assigning work orders ate up a large part of office staff time.
Toward solving both problems, we contracted for the development of a custom application of SugarCRM. This software automatically received, acknowledged, entered and assigned work orders. Technicians viewed their work orders on their laptops from wherever they are in the field. Failure to acknowledge receipt of new work orders w/in specified timeframes produces a message to the office for follow-up. Management by exception, rather than "touching" all of the routine became an essential part of our strategy.
In addition to displaying new work orders, each technician's laptop "dashboard" contains three key metrics. It shows their % complete on
-time, it shows the current total team % complete on-time, and it shows the threshold target of 90% of all work orders completed on time. Our techs vary in their competitiveness, yet all take great pride in their work and in their stores. And the respect of their other team members is important to them. And while each tech's individual KPIs are only shown to him, the fact that he is helping or hurting the team score is an important motivating factor.
With our custom SugarCRM program in place, we have been able to save countless office staff hours previously used for assigning work orders. Additionally, with the system metrics available on their laptops, our techs are even more motivated to not only complete their own work orders on time (we currently average 95%) with no call-backs, but we have also seen an upswing in team camaraderie and support. Finally, our clients have voiced great appreciation for our very-thorough quarterly reports, making our relationship with them more valuable and hopefully, long lasting.
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