MEASURING AND

BENCHMARKING
PERFORMANCE

Glasgow 27th September 2007

 Purpose of Seminars
What is the key to successful environmental performance improvement?

How to improve business performance and reduce environmental impact?

What tools do you have to help your business to be more sustainable?

Where do you start thinking about improving environmental performance?

What do you need to let you monitor and manage your businesses impact?
Random Numbers ???
Or a useful tool !

Data is central to the understanding and management of environmental

performance

If you can’t measure you can’t manage

Random Numbers or Data

Without data ………………………….

You may not know :

Where there a potential problems
What’s achievable
What solutions are available and what might work

And more importantly………….

If you’ve achieved it
How much your performance has improved
How much you have saved the business
Format of the Seminar

• Introduce Envirowise Measuring and Benchmarking Service

• Why measure and monitor business / environmental performance

• Understand setting and management of KPI’s
• Benchmarking performance

• Case Study – Three companies to practice on

•Action planning – “Here’s one I prepared earlier”

Format of Seminar

•Introduce Envirowise Measuring and Benchmarking Service

• Why measure and monitor business / environmental performance
• Understand setting and management of KPI’s
• Benchmarking performance
• Improve sustainability
• Action planning – “Here’s one I prepared earlier”

Mix of presentations, interaction and case studies

Each presentation introduces the next stage of the case study – Plan

Case study reinforces the core focus of the seminars – Do and Check

Action planning to take back to office - Act

 TEXT TITLE
Monitor and Measure - Why

If you don’t measure you can’t manage

If you don’t measure you can’t analyse

If you don’t measure you can’t improve

If you don’t measure you can’t check

Measuring and monitoring

By measuring and monitoring

• Improved understanding of the business……………..

• Inputs – Raw materials, stock levels, suppliers

• Process – Losses, quality, rejects, overruns,

breakdowns

• Outputs – Product, stock, effluent, waste, emissions, by-

product
Measuring and Monitoring

Understanding your business can lead to:

• Process improvements
• New products
• Innovation
• Opportunities
Measuring and monitoring

By understanding your business leads to

• Improved profitability

• This leads to…………..

• Business security
• More cash flow for improvement projects
• More attractive to investors
• Increased opportunities
Measuring and Monitoring

By understanding your business leads to

• Improved environmental performance

• This leads to…………..

• Reduced resource consumption

• Reduced waste generation, increased reuse, recycling
• Decreased effluent volumes
• Improved air emissions

• Balance of business and environment - Sustainability

Measuring and Monitoring

By understanding your business leads to…………………

• Improved environmental performance

• This leads to

• Improve reputation
• Customers have confidence in product
• Meet the requirements of permits
• Preferred supplier status
• Improved profitability – taking us back to beginning
Data – key to success

Understand processes
Significant environmental and financial benefits
Set and monitor performance improvements
Engage and track improvements
Drive forward further improvements

Support from Envirowise

 Monitor and Measure

The first steps on a difficult but rewarding journey……………………

Plan – Current performance

Do – Determine how to improve
Check - Are improvements working
Act – Fix what’s not working

But where do you start………………….

Or……………….
Envirowise Measurement Services

Many companies don’t measure their resource use or are even aware

Introduction of Measurement Services to assist

• Measurement and Benchmarking

• Linking cost savings to sustainability
• Action plan improvements
Envirowise Measurement Services

Help to achieve cost savings

Regular measurement and analysis of the resources (raw materials, energy,

water, packaging, etc) used by your company and the waste it produces

Help your company save money by minimising waste and becoming more
resource efficient as well as improving environmental performance
Envirowise Measurement Services

Register with Envirowise to :

• Get access to events, seminars etc

• Onsite support visit
• Measurement and Benchmarking Database

• Comparison of KPI’s
• Compare performance with other industry partners, or sectors

• Relevant information and publications

Envirowise Measurement Services

The measurement & benchmarking service offers an on-site visit to:

• Gather relevant process data

• Analyse your data

• Establish Key Environmental Performance Indicators (KEPIs)

• Set achievable cost effective improvement targets

Envirowise Measurement Service
Envirowise Measurement Service

So far …………………

221 Companies have registered

83 Companies have requested further assistance

41 have requested Measurement Visits

So why do we measure ?
 So why do we measure ?

Data is the key to understanding your business

Provides ability to meet key business drivers

• Increased profitability
• Better products and services
• Cleaner more efficient production
• Less impact on environment

Data helps create a sustainable business

So how do we measure ?
We know why we should measure………………

But how
Measurement – Where to start
What is it you actually do and how do you do it ?

Process maps identify main inputs and outputs of your business

Identifies the movement of materials through processes

Logical step through your operations

Flow chart of raw materials, products and waste within your

business

Should be easy to follow and understand

Process Mapping
In the case study we’ll get you to create a basic process map for your
“company”
Starting Measuring

So we know from our PROCESS MAP…………………..

9 What we do
9 How we do it
9 Where we need data
9 What sort of data we need

Most importantly

9Will also show you where to look for data

Measuring - Where to start
• Understand current data availability :

• Utility bills
• Meters - Main, sub or portable
• Production procedures / statistics / recipes
• Purchasing records
• Stock takes
• Suppliers
• Envirowise Benchmarking Database
• Publications
• Trade Associations
• Competitors
Where to get data

Material inputs
• Raw materials
• Water
• Energy

• Process Outputs
• Products
• By-products
• Solid
• Effluent
• Air Emissions
Where to get data

Material inputs
• Raw materials Purchasing records, stocktaking
• Water Meters, sub meters, invoices
• Energy
Meters, sub meters, invoices

• Process Outputs
Production / sales figures, stocktaking
• Products
• By-products Invoices
• Solid waste Transfer Notes, Contractor
• Effluent Invoices, Meters, Compliance data
• Air Emissions Meters, Compliance data
Data – Be clever and careful

Do you need to measure everything?

If there are gaps either from measurement or estimate is it needed?

Is it consistent between processes / departments?

What can you and can’t influence?

Who is responsible for collecting, collating and co-ordinating data?

What if you can’t measure ?

You can always estimate

Sampling and experimenting process flows

Use benchmarked data – e.g. Envirowise Benchmarking
Trails

Or create a mass balance for your process map

Process Map / Mass Balance
A process map with relevant quantities is a MASS BALANCE

Easiest way to create one…………………….

Book a Measurement Visit visit from Envirowise

Or take the data and add it to the process map

Similar to Financial accounting

Account for each input and output for each process step
What goes in must come out - somewhere
Determine quantities of raw materials used and wastes produced
Mass Balance
To ensure it is correct you must convert to mass – common unit of weight

Remember the density of the material e.g. kg/litre

What if any goes into stock ?

Material consumption = Purchases + Opening Stock – Closing Stock

Production = (Sales-Rejects) + (Closing Stock – Opening Stock)

Use your data to determine total weight of inputs and outputs to either :
Site as a whole
Process
Production line

With a process map should be relatively easy

Potential Improvements

How do you work out where you can make reductions, improvements ?

Initial something will just look wrong – using too much, losing too much

Differences between production lines, weeks, day, months

Trend data to see variations – aim to understand variations

Benchmark results from industry peers

Setting of improvement targets

Trial process changes, product alterations

Potential Improvements

Share data with supply chain - see what they can do to help

Talk to waste management contractor, Scottish Water

Brainstorming – generate ideas

Financial analysis – where are the breakeven points

Talk to Envirowise
Publications
Case studies
Measurement visits
Setting KPIs

Measurements for understanding processes

9 Used for setting the baseline of current performance

9 Tracking changes to performance from potential improvements

Basically what is and is not working

Encourage monitoring of processes to set improvement targets

Can compare your performance

They let everyone focus on what is important

Setting KPIs

Should be easy to understand and visible

Can numeric or non-numeric but they have to be

Specific
Measurable
Achievable
Relevant
Timed

Examples – litres or water used/ unit of product

units of electricity per month
kg of waste per product shipped
Benchmarking

Key to successful benchmarks :

Identify what to benchmark – measurement standard for comparing

Continuous activity to………………………

Identify
Understand
Adapt best practices and processes

Measure products, services and processes to determine targets, priorities

and improvements

Resulting in your planned cost reductions / environmental improvements

Benchmarking

Four main types of benchmarks

Internal – compare own operations and processes

Competitive – compare your processes with competitors
Function – compare similar processes across broad industries
Generic – compare irrelevant of industry

Again follows the PLAN DO CHECK ACT

In case study think about what you would benchmark

Introduction to Case Study
Case Study

Three companies
• Sandwich making – Really Posh Sandwiches (RPS)
• Reprographic equipment leasing - Copycats
• Manufacturing - Quackers

Aims of case study – to reinforce………………

9 Understand measuring & monitoring

9 KPI setting and benchmarking
9 Identify areas to improve process performance
9 Determine the correct data sets to record/track
9 Increase profits, decrease environmental impact

9 And hopefully save your business some money

Case Study
Data packs
• Overview of company
Three companies
• Sandwich making
• Understanding of core
• Reprographic leasing processes
• Manufacturing • Create process map
Understand measuring, monitoring • Process data
• Mass balance
KPI setting and benchmarking
• Potential process
Improve process performance improvements
Increase profits, decrease environmental
• Consider KPI’s
impact • Correct data ?
Case Study
45 minutes

Try to allow 5 mins for individual review of information

5 mins at the end to bring it all together

Work through
• Overview of company
• Define process map
• Mass balance the processes
• Determine improvements
• Consider KPIs
• Remember – Activities which have critical impact on your business
Case study feedback

• Understand how to map out a process

• Use data to work out mass balances
• Work out areas for improvement
• Consider suitable KPI’s and Benchmarks
Setting KPIs and Benchmarks

Considered KPIs and Benchmarks in the case study

More detail about

Types of KPIs
Scope of KPIs and coping with fluctuations
Benchmarks

So how do you choose the right KPIs

Setting KPIs

Choosing the right KPI’s

Key to the success of the planned improvements

Reflect the overall goals of the business

Be critical to the success of planned improvements
Be SMART
Flexible, things will do wrong

Most important – involve employees

Setting KPIs

How to use KPIs:

Benchmark to determine suitable and achievable improvements

Monitor and measure success of planned improvement projects
Motivate staff
Communicate performance
Setting KPIs

Types of KPIs

3 main types of KPIs

• Management

• Financial

• Operational
Setting KPIs

Management KPIs

•Will not directly improve business / environmental performance

•Mainly used within Senior Management levels of the business

•Measure performance of management systems / targets

Number of targets achieved

% of staff completed training
Number of audits completed
Setting KPIs

Financial KPIs

•Reflect performance measures in terms of finance / costs

•Mainly used again at senior levels of business

•Can be misleading
• Changes to material costs
• Exchange rates

• Common examples
• Water costs per unit of production
• Transport costs per unit sold
Setting KPIs

Operational KPI

Most commonly used KPIs

Specifically monitor process efficiency, environmental performance
Link directly to mass balances
Easy for everyone to understand
Less influence from external factors

For example :
Kg of plastic recycled per production unit
Monthly energy consumption
Reject product per process line
Setting KPIs

Fluctuations in processes

Absolute indicators – no reference to any other factors

suitable for no variation in production volume
litres of solvent per annum

Relative indicators - fully linked with production, eliminate fluctuation

litres of solvent per tonne of product

Weighted indicators - useful where there is a range of products

changes to production process
assign a weighting factor
Benchmarking

9 Helps set realistic and achievable targets

9 Challenges what is seen as “we’ve always done it that way”
9 Shows what is possible – others can do it why can’t we
9 Allows employees to see the problem and the solution
9 Can create competition between departments

9Determine how you perform compared to others in sector

Benchmarking

Four main types of benchmarking

1. Strategic
2. Functional
3. Best practices
4. Product

Easy to choose either a single format or a mix

Strategic can be the best place to start to set the “vision for the business”
 Benchmarking

Strategic benchmarks

Comparing different strategies and their success in the marketplace

Could look at process capability, product lines and technology

Usually starts with the customer – meeting their needs/expectations

Sets the overall context for where the business wants to get to, and sets
out how to get there – if others are willing to benchmark
Benchmarking

Functional benchmarks

Looks at core business functions

Procurement, Production, HR, Finance

Can be easier to get a “partner” – less competitive risk

Links into Management KPIs – how the business is run

Can be used internally to compare performance between functions

Benchmarking

Best Practices Benchmarking

Looks at the main business process – making rubber ducks, widgets

Breaks it down into core areas and is focused

Can look at either management or process

Suitable for internal / external

Can even look at different process lines

Benchmarking

Product Benchmarking

Looks at alternative designs, trade offs

Especially useful for deciding on modifications, impacts of process

modifications

Can help with promotional evidence for consumers

Best evidence for reduced environmental impact of your business

operations
Benchmarking

Making benchmarks work

Management and employee support

Relevant to the business and the process/product
Strong and reliable data
Achievable action plans to reach the benchmark
Regular review and updating
Communication to team/employees to keep them motivated
Support from benchmarks partners

Join the Envirowise Measurement Service – Benchmark Database

Case Study

Next stage

Review interim data

Consider thoughts on KPI’s and Benchmarks
Correct type
Influenced by variations
Easy to understand and communicate

Define KPI’s and Benchmarks based on learnings

Aim for a range of Management and Operational

Reporting and Communication

Data collection, action plans, KPIs and benchmarks

All rely on regular, informative

Communication

It is key to the success of any improvement

programme
Reporting and Communication

All communication is important but you have to get it right with your staff

Positive and effective internal communication leads to

Employee engagement – they will understand how it affects them

Involvement – they will see how they can influence the process
Commitment – they will get involved
Productivity – they will get motivated

It cannot be one way, you have to listen and take on board what they are
saying
Reporting and Communication

So how can you get it right?

Ask yourself - “Can the person receiving this message understand it?”

The following hints and tips can help

Use the right language
Listen
Be descriptive
Focus – what is the key message people have to take away?
Large volumes of data – difficult to understand or read
Depends on size of audience
Make it timely
Reporting and Communication
Pictures paint a thousand words

Either - Waste has reduced waste by 25%

Or

We’ve reduced waste from 6,000 tonnes

to 4,500 tonnes per annum.

That is equivalent
to 150 skips per annum
Reporting and Communication

Go back to your process maps, and use before and after data

Good way to show where improvements have been effective or failed and
why

Visual, and easy to understand

Involve teams in data collection to physically show where improvements

are having an effect

Can also use graphs to communicate and monitor process efficiency – one
tool two purposes.
Reporting and Communication
Various types of graphs
Visual
Quick and easy to prepare
Updated on a regular basis
Can pinpoint problems quickly

Bar charts – simple to use and understand

Trend graphs – manages large fluctuations in data
Scatter graphs – good to investigate relationships at various periods of time
Bar Charts
60

50

40
Line 1
30 Line 2
Line 3
20 Line 4

10

0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
 0
10
20
30
40
50
60
70
Ja
n
Fe
M b
ar
ch
Ap
r
M
ay
Ju
ne
Ju
ly
A
Trend Line Graph

ug
Se
pt
O
ct
N
ov
D
ec
Line 1
Trend line Graphs
70

60

50

40
Line 1
30 Linear (Line 1)

20

10

0
n

v
ch

ay

pt
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No
Ja

Ju

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Scatter Graph

300

250

200
Waste
150 Target
Linear (Waste)
100

50

0
0 200 400 600 800 1000
 Reporting and Communication
Case Study

Think about how you would communicate your KPIs

and Benchmarks

What is the easiest way to present your findings

to employees?

How can you make it interactive, interesting and informative?

Action Planning
So we’ve gone through………………………………….

Why you should measure and monitor business / environmental performance

Process Mapping - a tool to see where to collect data
Data collection – where to collect data and how
Setting of KPIs – how to set various types of KPIs
Benchmarking – using data to highlight areas of improvement
Effective communication

Tried it all with the case study

So now that we’ve learnt all this how are going to put it into practice !!
Action Planning

Apart from signing up to Envirowise Measurement Service

What are you going to put in place back in the office ?

Always good to get some quick wins – pick the low handing fruit

Trial the system out on one function, process, department ?

Organise a Measurement visit – the help doesn’t stop after lunch

Help start off with process maps
Identify and collect data
Set realistic targets
Action Planning
On-site visits - a gentle reminder

For eligible companies, Envirowise on site visits are:

Confidential - we will not share our findings or recommendations with anyone

else without your agreement

Free to you - no hidden fees or catches

Expert and proven - we use qualified and experienced advisors and have
delivered over 5,000 visits

Company specific - we can tailor visits specifically to your company and

address the issues that concern you

Government funded - trusted, dependable and long standing

Action Planning

Start with gaining a full understanding of what your business actually does

Process Maps

Get the right people in a room and get it down on paper

Not rocket science – walk your way through the process
Detail depends on complexity of business

Start at a high level then get down to detail

Determine from process maps what data you need

Action Planning

Data Collection

• From the process maps work out what data you need

• Review current data sources in the business

• Work out if the gaps are important and if so how to fill them

• Use data to work where you can make improvements and start to action
plan
Action Planning

KPIs and Benchmarks

9 From the planned actions set a range of SMART KPIs

9Look at where you can internally / externally benchmark performance
9Monitor and track performance
9Communicate with employees / stakeholders
9Report successes
9Aim to continually improve
Action Planning

In your groups round the table

Work out what actions you will be taking when you get

Can you work together with people round the table for support

Or even to benchmark your performance

Consider thinking about how you can share your learnings with your
company

Or arrange a Measurement Visit to kick start you

Action Planning