The National Private Truck Council (NPTC), a U.S. trade association focused on the interests of companies with private fleets, conducts an annual Private Fleet Benchmarking Survey. This survey has three goals: (1) to validate private fleet performance based on comparative peer data; (2) identify areas of improvement and opportunity; and (3) identify the significant trends affecting private fleet operators.
In many cases, benchmarking data is difficult to use—i.e., making apples-to-apples comparisons is not easy. This has always been my concern with benchmarking, and when I told this to Gary Petty, the President of NPTC, and asked him for references, Gary did not hesitate.
I talked to three fleet managers, including George Carpenter, Director Project WMS, at The Army & Air Force Exchange Service (AAFES). AAFES is a joint military activity that provides quality merchandise and services to active duty, guard and reserve members, military retirees and their families at competitively low prices. AAFES returns earnings to the Army and Air Force to improve troops’ quality of life and to provide a dividend to support military Morale, Welfare, and Recreation (MWR) programs (see AAFES Fact Sheet for more details).
Today, I will highlight how AAFES uses NPTC’s benchmarking data. In a future posting, I’ll highlight how others are using the data.
One of George’s key points is that many private fleet operators, including AAFES, go through an annual exercise to prove that they are better than for-hire alternatives. Using the benchmark data, AAEFS can show that they are very competitive with other private fleets on several key metrics. However, several years ago, they noticed that their fleet had far more empty miles than many of their peers. There was no good reason for this discrepancy, so they launched a continuous improvement program and made significant progress in reducing empty miles.
George also pointed out that while they use almost all of NPTC’s benchmark data, they weigh the metrics differently according to their needs. For example, AAFES’s private fleet can backhaul vendor goods to their DCs, but they are not allowed to backhaul other companies’ goods. So, even if a good metric for trailer utilization existed (George doesn’t think so), this would not be a good metric for them to judge their fleet by, so this metric would not be highly weighted. By looking at their operations and goals, AAFES can determine which NPTC metrics to focus on, and whether achieving average performance is good enough or whether they should strive to score near the top.
The data also helps AAFES quantify improvement opportunities in dollar terms. For example, if a private fleet’s trailers are empty 40 percent of the time based on total miles traveled, and the standard is just 28 percent, and you run 27 million total miles and you include trailer utilization numbers into the mix, then you can calculate the savings that are possible by coming up to standard. In short, the metrics and peer performance data play a key role in helping AAFES prioritize their continuous improvement programs.
AAFES also finds the trend data useful, particularly when it comes to capital budgeting. For example, in determining how long they want to keep a heavy duty power unit, they pay attention to the trends. In 2006, these units were kept for 6.4 years. By 2008, it had fallen to 6.1 years. Similarly, the data shows that 68 percent of the study respondents expect their private fleet to handle more freight over the next five years. If AAFES is thinking of moving against a trend, for example shedding trucks while the trend is towards bigger fleets, NPTC gives them an opportunity to talk to their peers to understand why they are moving to bigger flees. Similarly, a continuing topic of conversation is how well others have done on the assessments. If there is a metric you are not scoring particularly well on, but a peer is, you can ask them how they got there and then determine whether that method might work in your organization.
In fact, one of the key benefits of NPTC membership is the opportunity to learn from your peers. For George, these peer-to-peer interactions are a “huge” advantage of participating in NPTC.
