As a business owner you should be looking for mechanisms to measure the efficiency of your operations. These mechanisms are generally called Key Performance Indicators (KPIs) and each one of the areas in your business will have a few that you should identify and measure so you know when something needs your attention. A good set KPIs will allow you to see that resources are being used efficiently and won't be easily fooled by the underlying factors that produce the KPIs themselves.
At Hiary we believe that there are four KPIs that are essential to efficient skip hire businesses:
- Bin Turnover Rate (Bin Turns)
- Moves Per Day (Pickups, Deliveries, Exchanges)
- Hours Travelling Ratio
- Truck Engine Hours / Hours Per Day
These indicators have been selected to ensure that your truck and bin assets are being utilised efficiently and to keep on top of your capacity planning for the future. In order to keep your building and casual clients happy you must have the capacity to service them both without disappointing anyone by not delivering on the day you agreed. By monitoring the overall hours that your trucks are being utilised to do work you will know how close you are to capacity. You will then be able to plan for purchasing an additional truck and/or bins to service your valued clients before you are getting booked out.
How many hours of the day drivers spend driving (actually moving bins) is important to measure as just because the truck engine was on doesn't mean the truck was working hard for you. This is a great indicator as it provides a lot of different insights into where things may be going wrong operationally. If the trucks are not spending a lot of time actually on the road it could mean one of a few things. It could be indicating that all your jobs are very close together if the number is low (this is actually good but is unlikely). If the number is low and the moves per day indicator is also low then probably the yard needs to be looked at because the driver is spending too much time loading, unloading and tipping bins.
How many moves your trucks are making per day will depends on a few factors but as an indicator it can easily highlight various issues. If the moves per day ends up being low then either you are travelling a long way or you are spending a long time in the yard or at customer sites. If you have clients who regularly make you wait either charge a fee or fire them (time is money. literally), having to wait just fifteen mins is costing you the ability to take on another job. I suggest you charge at least $200 an hour in 15min blocks otherwise there's no incentive to make sure the bins ready to go.
Unfortunately customers don't call when the bin is full, they call when they are sick of having a bin outside the house. Implementing a system where you are proactively trying to get your bins back so you can hire them out again is the best solution. You should ask the customer when he thinks he'll be finished with the bin and arrange to call the day prior to see if it will be ready for you to pickup. This will optimise your turnover rate and will mean you can spend less on buying bins and actually expand the business, service more customers or turn a profit. The less days bins are on site on average the less skips you'll need to service your clients.
If running all these calculations sounds like a lot of effort then you'd probably be right. Some of these can be captured using dumpster software like Hiary and some of them are best captured using a GPS tracking solution.