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(4) Customer (tanks) gains & losses, forecasting your desired growth, in vol- ume and margin As a result, MTD variances to plan KPI's should be monitored daily for liquid product volume, extended gross margins down to trade class and price agreement levels, service revenues, as well as payroll expense (straight and overtime). Metaphorically, a pilot planning a flight from point A to point B under- stands the importance of achieving desired results: on-time departure, smooth flight and safely arriving at the destination, on time. Strategically, with the technology and information at his/her disposal, such as the aircraft's gross weight, potential traffic in route, forecasted weather, wind and other con- siderations that could adversely affect achieving the overall objective, the pilot determines the best route to take, altitude to be used while in route and projected fuel consumption. Good planning based on good information, past, present and forecasted increases the likelihood of achieving expected results. Some might suggest that this is considered enhancing predictability. Now that your plan has been put in place, with your desired revenues and gross profit, your resulting net profit value will be heavily influenced during the month by your ability to achieve these revenue goals set forth but also your ability to control your sometimes uncooperative operating expenses. This is where your short-term tactics come into play, using carefully defined KPI's that, when scanned by you daily, will inform you of potential threats to the achievement of your objectives. Knowing what the threshold values of these met- rics are for your company at any given time is important because without this benchmark, the KPI's are meaningless and will not solicit any of your concern or as important, your action. In addition to the four categories of KPI's mentioned earlier, several other operational KPI's should be monitored closely, daily: Margins – Daily and MTD unit margin and extended gross margin by product, trade class and price agreement type Gains & Losses – net ahead/behind tanks, volume and margin Delivery – Gals/hour & GM$/hour, strongly influenced by its components of gallons/stop, miles/stop and stops/hour Service – Technician callback ratio, technician calls/8-hour day, excess calls by customer and revenue by technician (the last will require adjusting for work- ing on contract calls) Accounts Receivable – Days of Sales Outstanding (DSO) Degree Days – often used as a b e n c h m a r k a g a i n s t i n c r e a s e d o r decreased sales volumes, using a three or five year average In many ways, the experience of any fuel dealer trying to navigate today's com- plex market environment is similar to the pilot's needs to accomplish his goals as well. While in route, as compared with a dealer's month, he will be confronted with certain unexpected bumps along the way, making various adjustments with power, altitude and heading, as needed. He relies heavily on accurate and current information provided by the technology employed in the cockpit and made visible through his instruments. Being on top of this information at all times allows him to "stay ahead" of his aircraft and not behind it, poised to react with informed and decisive corrective action. Think of business analytics containing your KPI's as your instrument panel, a place to find everything you need when time is of the essence, and an invaluable partner that can help you arrive at your destination predictively, on time and safely, regard- less of the challenges you face. Bob Levins is a managing partner of Angus Analytics, providers of the BRITE cloud-based dashboard and performance reporting platform. www.fueloilnews.com | FUEL OIL NEWS | AUGUST 2015 39 BUSINESS OPERATIONS l F O N Good planning based on good information, past, present and forecasted increases the likelihood of achieving expected results.