Rumpke Consolidated Companies Inc. ranks among the nation's largest privately owned waste and recycling services companies. In addition to providing extensive residential, municipal, commercial and industrial services, the company owns or operates nine landfills, seven transfer stations and five recycling centers in Ohio, Kentucky and Indiana. When Rumpke's business soared several years ago it implemented performance management systems and processes. Extending BPM disciplines from finance to operations, the company has learned to look at its business in new ways, and it has leveraged that knowledge for profitable growth.

BPM Magazine: What's your performance management software configuration?

Pastura: Most of our systems are AS-400 based. We have a suite of products from what used to be called Infinium. It serves as our HR payroll system, general ledger system and accounts payable system. Our billing system is called Soft Pack and we customized it to accommodate our needs. We use Cognos Planning for budgeting, forecasting and report generation. We also are moving information from our planning suite to the reporting tool, which is Web-based, to secure a broader audience who will have the ability to view budget versus actuals, the productivity metrics and key business measures relating to financial performance.

We actually started with an antiquated form of the Cognos software about seven years ago. We grew more excited within the last three years when Cognos introduced the refined, clean and easy to use Web-based product. The new system doesn't require its users to have expertise in the field of information technology. In fact, as long as you have a database administrator behind it who knows a bit about it, you can use it from a finance standpoint.

BPM: What's your budgeting, planning and forecasting process like?

Pastura: Today, the process is much faster. There was a time when it would take us six months to create the reports that Cognos helps us generate in minutes. The system has been beneficial during divestiture and acquisition periods. It helps us provide our internal team and our external consultants with appropriate information when necessary.

Rumpke focuses on four key lines of business: hauling, disposal, recycling, and transfer stations. Rumpke operates transfer stations to consolidate hauling between areas where the waste is collected and where it will be disposed. Inside transfer stations trash is moved from smaller garbage trucks onto larger trucks to consolidate hauling to distant landfills.

We also review our budget to identify revenues that are driven by our sales team. These identified revenues are used to build our revenue plan and identify revenue-driven costs. We can determine, depending on how many loads we're picking up, what our costs are going to be. Our budget model is built that very same way. We put the revenue in, and it flows down to calculate one of our simplest cost drivers -- disposal cost -- which then rolls down into one of our single largest costs: labor (drivers). In the end we're left with our bottom line. The most beneficial part of the system is its ability to display the measures in-between. It allows us to concentrate on tracking actuals against the budget.

BPM: What's the process for tracking the actuals against budgets?

Pastura: Currently we have legacy systems for all of our key district operations managers, regional vice presidents, corporate staff, and finance staff. Basically, all the key people in each one of our 17 districts receive access. We pull our information from our billing system to calculate hauling productivity; our scale system to calculate disposal productivity; and our payroll to calculate wages, hours and overtime.

Our goal is to focus on the major company cost drivers so that we can discover improvement areas. For example, a hauling manager can review specific detail, including budgeted yards per hour or yards per load, and compare it to their actuals, as well as customer costs and revenue.

BPM: Can you give any examples of decisions that have been made because the operations managers had access to this kind of information?

Pastura: It's actually been fun to watch over the last nine months. The possibilities that the system offers really started to open their eyes; it just took a little while. They're able to look at the type of work they do. For example, from a hauling perspective, we have different load types; some we charge for, and some we don't, as part of the overall service package. Some operations managers realized that jobs which should have generated revenue weren't identified as revenue generators. So they had the information to ask "Are we not charging the customer, or is this just a data entry error?" The system allowed these managers to investigate the situation and to gather the details necessary to ask the right questions to resolve any issues.

BPM: So it sounds like the operational measures -- and I would assume costs as well -- are also tied in with revenue?

Pastura: Yes. The Soft Pack billing system allows us to store cost drivers on a per-unit basis. The system also allows us to calculate our disposal costs, thereby helping us to develop rough customer profitability analyses. Cognos offers an advantage because it standardizes the data and provides a dimensional view in a more efficient format. For example, many of the previous legacy systems failed to offer uniform district identification. There was a five-digit code in one system, a three-digit code in another system and even a two-digit code with a star. Trying to bring all of them together was never very easy. Our new system has solved all that.