Case in Point: Leveraging Operational Metrics
BPM: How did you go about choosing the operational metrics to track?
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Pastura: A couple of them we've just always had. Rumpke is a third-generation, family-owned company. The key metrics have always been driven by the same thing -- whether it be a yard or a ton. For the waste business, that's key.
BPM: Do the operational managers see each other's numbers? Has this changed the dynamic among them, or between them and finance?
Pastura: They're able to see, within their market, some information they never would have been able to see before, which is facilitating further investigation into the numbers, information gathering, and idea sharing. I'd like to give the full reporting system total credit for that, but I can't; it's not just the system that's important but what you do with it. Our hauling director has recognized the importance of this reporting package and the benefits to being able to use it. He encourages the dialogue.
BPM: Are there any specific examples of where the system has encouraged collaboration?
Pastura: There are little success stories along the way. I have one particular sales manager that has really taken off with it on the planning and budgeting side and is actually using the tool to pool information to make some sales decisions. I have a regional vice president who wants all his operations managers and direct line support to be trained to use the system for all reporting.
The COO, CFO and corporate controller have been big supporters of the product, and they're actually pushing everyone to standardize and correct a lot of data. When our executive management reviews reports at a consolidated level they don't want to worry about the accuracy of the detail behind the scenes.
BPM: How did the operations managers react to being asked to provide standardized data?
Pastura: They figured out quickly some things really could be, and needed to be, standardized. I think we're still working through some of the adjustments, and the implementation of new procedures, but we're making a lot of progress.
For example, people always thought in terms of a roll-off load. The roll-off loads are the big containers that you see at construction sites. People thought of a roll-off load only as a container that had garbage or waste in it that they had to dispose of. Well, the broader approach -- and we had this conversation with our operations managers -- is to regard a roll-off load as a unit of work. And even if you deliver an empty container to a location that, for some reason, you can't get to because it's blocked, you still had to spend time and money, and you could have been doing something else. Now, it may be a non-revenue-generating load, but it still is a measure of work. So it's that kind of education and change in thought that is slowly happening.
BPM: Have you achieved tangible results?
Pastura: Some metrics have improved, but the truth is our performance as a whole, as a company, has improved. I think some of the improvement is just getting the data so that we can compare apples with apples instead of apples with oranges. Rumpke has a good group of managers that care about the business, and they take pride in improving the bottom line. The key is to get them timely, accurate information to make a difference.
BPM: What would you say to an organization that currently only uses financial metrics? What benefits do you think companies gain by focusing more on the operational side of things?
Pastura: It offers a new perspective on your business and clarifies improvement areas designed to add more value, whether it be to the bottom line or to the work that people do. You may find out you've got people who are spending an awful lot of time looking at data and regurgitating it in 15 different ways. You also might discover that you can take that person and put him or her into a revenue-generating position. All in all, I truly believe that you cannot evaluate a company on financial results alone. You have to look at the productivity behind the results to make the best business decisions.
