Following from my last blog, once the decision was made to remove the need for business premises, I wanted to make sure the process we used to receive bookings was efficient.
The process used in 2005 was different to what we use today – mostly because of the volume of work we now manage. The technology we employ was a little different back then too.
Over time, our process has changed, improved and evolved in to the efficient system we have today. The Japanese have a word for this process of constant gradual improvement and it is known as Kaizen.
Initially, there were benefits to using online booking forms but I didn’t really think about how the information we received would be used to communicate and what the full process flow of that information would be. For example, I didn’t really think about invoices in too much detail. I never thought about tracking customer trends, or Key Performance Indicators.
Going back to day one, we had an online booking form that would send a formatted email with a customers journey details. This would include the date, pick-up times, number of passengers etc. The information from that email was then copied manually in to a spreadsheet and while there was only myself as the driver, this worked fine. Things began to change though as the volume of bookings increased and the number of invoiced accounts improved. Imagine how long it would take at the end of each month to sort out all the bookings for one single client and then put them on an invoice.
From here, there were a number of steps I went through to build a system that could manage the administrative side of the business – in a later blog I plan to talk about vehicles, drivers, chauffeur etiquette and all sorts of things about being out on the road but first, it is essential to get the foundation in place.
A business cannot operate efficiently unless it is managed appropriately.
The first step in the chain was to move all bookings from a spreadsheet and in to a database so filters could separate information and group specific details together for invoicing – journeys for customer A, B or C between dates X and Y. Next, the reporting function of the database was used to construct a formatted invoice that could be exported to a recognised file format and emailed to a client as an attachment (printing everything out became a nightmare as our volumes increased, there was paper everywhere).
I realised a filter could be used to produce a list of future journeys that a driver had planned. These journeys could be listed in a report, then exported as a web page and uploaded to a secure area of our web site. Now a driver only had to check on their own web page to see which jobs they had coming up. This was great if we were all working different shifts and asleep at different times. I also realised that if a drivers journeys could be filtered, exported and uploaded so too could a customers journeys.
At this point, things really started to become much more technically involved and we approached our first software developer. He linked the email through some clever programming and it put the booking from the web page straight in to our database system thus automating the bookings and reduced the need for manual copying (which incidentally removed the opportunity for errors to occur).
The database system we now had made our entire operation much easier to handle. If we had an enquiry from a customer who travelled two years earlier, we could retrieve all the details within seconds. However, there was still one major problem and that was that we could not alter a journey unless we were sitting in front of the computer. The next improvement introduced “remote desktop”.
Eventually we felt we developed our system as far as it would go and the next stage was to hand it over to a professional software company.
They could make it a web based booking system – basically a database that runs on a web server that drivers and customer can access 24 hours a day. The added bonus with this is that our manager’s had a new interface which meant they now manage bookings directly from their mobile phone (in real time).
Monday, 19 April 2010
Thursday, 8 April 2010
Lean
In my last blog, I wrote about Toyota and how their principles focus on eliminating waste or “Muda”. When I first set up DrivenByQ, I wanted it to be lean – for there to be no waste. In order to do this it was important to understand how a conventional company operated and to analyse its procedures. For example a conventional private hire company has a phone line and a member of staff to answer it.
A member of staff is typically operating a radio 'base' station or data system. That system needs an aerial to communicate with the vehicles. The radio system needs tall premises to mount a large aerial on top. The building needs electricity and it incurs other costs like rent, rates, insurance, furniture, stationery and even things like fire extinguishers. There is also a cost for cover during staff holidays or sickness.
Most offices these days have computerised despatch so there are IT costs to add and hardware eventually needs replacing too. The data heads, or radio equipment in the cars are costs which must also be included too! The office has only one way of recovering the costs in relation to fare paying passengers and that is by charging their drivers a rental fee for a radio (known in the industry as settle - typically between £100 and £120 per week). The driver then works a number of shifts and what they earn in fares is what they keep (minus their fuel, insurance, servicing costs, etc).
An office typically needs 17 cars just to break even each week. With all these factors in mind, I set about analysing the work flow related to receiving a booking - right the way through to despatching a car. I questioned each stage of the process and asked if it could be reduced? I also asked if there was a newer technology that could assist in the process. It took no time at all to realise that using an online booking system would instantly negate the need for a member of staff as the customer could input their details directly in to a web page.
Without a member of staff, there was no need for a fixed phone line or the associated costs. A booking page enhanced the quality of information received too as web forms would not submit until all the key information was acquired. The submitted booking from our web site sent an email notification directly to my smart phone - eliminating the need for radio equipment. Without the need for a member of staff, a phone line or radio, the premises themselves become obsolete and so did all the associated costs. This was just the start of process improvement and elimination of Muda in our organisation and the beginning of lean.
A member of staff is typically operating a radio 'base' station or data system. That system needs an aerial to communicate with the vehicles. The radio system needs tall premises to mount a large aerial on top. The building needs electricity and it incurs other costs like rent, rates, insurance, furniture, stationery and even things like fire extinguishers. There is also a cost for cover during staff holidays or sickness.
Most offices these days have computerised despatch so there are IT costs to add and hardware eventually needs replacing too. The data heads, or radio equipment in the cars are costs which must also be included too! The office has only one way of recovering the costs in relation to fare paying passengers and that is by charging their drivers a rental fee for a radio (known in the industry as settle - typically between £100 and £120 per week). The driver then works a number of shifts and what they earn in fares is what they keep (minus their fuel, insurance, servicing costs, etc).
An office typically needs 17 cars just to break even each week. With all these factors in mind, I set about analysing the work flow related to receiving a booking - right the way through to despatching a car. I questioned each stage of the process and asked if it could be reduced? I also asked if there was a newer technology that could assist in the process. It took no time at all to realise that using an online booking system would instantly negate the need for a member of staff as the customer could input their details directly in to a web page.
Without a member of staff, there was no need for a fixed phone line or the associated costs. A booking page enhanced the quality of information received too as web forms would not submit until all the key information was acquired. The submitted booking from our web site sent an email notification directly to my smart phone - eliminating the need for radio equipment. Without the need for a member of staff, a phone line or radio, the premises themselves become obsolete and so did all the associated costs. This was just the start of process improvement and elimination of Muda in our organisation and the beginning of lean.
Friday, 26 March 2010
Basic Principles
Last night I watched “The Toyota Story” on BBC2. It was sad to see the mighty giant in so much difficulty and receiving so much bad publicity. The programme showed how Toyota became the World leader in manufacturing and the five key principles that got it there. For me it was important to be reminded about those principles but also how vital it is to stay focussed on them.
DrivenByQ is based around the same principles and the importance of eliminating waste or “Muda” as the Japanese call it. A lot of people think the principles can only be applied to a manufacturing company with a manufacturing process but to me it can be applied to any company with a continually repeated process.
Take for example the visit that Toyota paid to Ford and the tour around its vast Detroit plant back in the 1950’s. The Japanese witnessed how Ford made cars and how some vehicles had reoccurring faults that appeared in the manufacturing process. At the end of the production line, Ford had an inspection area and any defect vehicles would move to an area for re-work so the individual car could be fixed.
The Japanese saw this and decided that constantly fixing the same fault was ridiculous. They decided it was better to understand the root-cause of the problem and fix that instead. This way the fault could never re-occur. Toyota of course moved to eliminate the re-work area as it was a wasteful process. Why would anyone want to spend time making something wrong and then spend a second amount of time (and money) making it right – today they call it the “right first time” philosophy.
Finding the root cause of a problem is also the heart of a quality system and is intrinsic to a quality process. This story is important because it is a simple but fundamental element in running a modern “lean” business. You can see this directly translated in to our own organization in the way we receive data from our customers. Our booking forms cannot be submitted until all the necessary basic information is present. We receive quality information to begin with so that the rest of the process stands a chance of being correct.
Some of our competitors still use fax machines with no control over the format or completeness of the information they receive. When our competitors have to pick up the phone and call a customer for them to do re-work and acquire the missing data, DrivenByQ is already ahead and ultimately more cost-effective.
DrivenByQ is based around the same principles and the importance of eliminating waste or “Muda” as the Japanese call it. A lot of people think the principles can only be applied to a manufacturing company with a manufacturing process but to me it can be applied to any company with a continually repeated process.
Take for example the visit that Toyota paid to Ford and the tour around its vast Detroit plant back in the 1950’s. The Japanese witnessed how Ford made cars and how some vehicles had reoccurring faults that appeared in the manufacturing process. At the end of the production line, Ford had an inspection area and any defect vehicles would move to an area for re-work so the individual car could be fixed.
The Japanese saw this and decided that constantly fixing the same fault was ridiculous. They decided it was better to understand the root-cause of the problem and fix that instead. This way the fault could never re-occur. Toyota of course moved to eliminate the re-work area as it was a wasteful process. Why would anyone want to spend time making something wrong and then spend a second amount of time (and money) making it right – today they call it the “right first time” philosophy.
Finding the root cause of a problem is also the heart of a quality system and is intrinsic to a quality process. This story is important because it is a simple but fundamental element in running a modern “lean” business. You can see this directly translated in to our own organization in the way we receive data from our customers. Our booking forms cannot be submitted until all the necessary basic information is present. We receive quality information to begin with so that the rest of the process stands a chance of being correct.
Some of our competitors still use fax machines with no control over the format or completeness of the information they receive. When our competitors have to pick up the phone and call a customer for them to do re-work and acquire the missing data, DrivenByQ is already ahead and ultimately more cost-effective.
Wednesday, 17 March 2010
Increased costs, increased opportunities
Yesterday I read that the cost of petrol (and diesel) is likely to increase in the next few weeks to a record high. There is also a planned increase of 3p per litre in fuel duty by the government on 1 April 2010. In addition to this, Manchester Airport just increased their annual car parking costs by 80%. That is a significant increase!
Now, when you get in to the business of airport transfers, you quickly realise there is a LOT of competition in the market place; there are low barriers to entry and most of your competitors never calculate their break even point when setting their prices – a lot of them don’t calculate the turnover they need to continue trading either.
So, you might ask, am I bothered? Am I feeling depressed and gloomy? Well, no. I actually see this as an opportunity to develop our business and sing about the benefits of our fantastic customer service. From day one, we were always going to be the most efficient company in the market place. We embraced new technology and ensured that our business model was not only robust but that it gave the best value to our customers and (importantly) our drivers. We also ensured that we knew our costs and what type of volume we needed in order to operate at a profit.
After the recession of last year, we are now in a much stronger position. First of all we are established in the ‘airport transfer’ market so people know we are reliable and reputable (the growth we have had in the last five years speaks for itself). Secondly, we deal with high volume so a lot of our airport transfer journeys link-up (this gives us economies of scale). And finally, our on-line booking and management system delivers such a saving on conventional office based overheads, we are way ahead of our competition.
In short, although the increased costs of fuel, parking and licensing are significant, there is comfort in the knowledge our competitors are facing the same challenges. There is also a lot of excitement in the fact we can really shine as an efficient company and offer so much more to our own – and our competitors - customers.
Now, when you get in to the business of airport transfers, you quickly realise there is a LOT of competition in the market place; there are low barriers to entry and most of your competitors never calculate their break even point when setting their prices – a lot of them don’t calculate the turnover they need to continue trading either.
So, you might ask, am I bothered? Am I feeling depressed and gloomy? Well, no. I actually see this as an opportunity to develop our business and sing about the benefits of our fantastic customer service. From day one, we were always going to be the most efficient company in the market place. We embraced new technology and ensured that our business model was not only robust but that it gave the best value to our customers and (importantly) our drivers. We also ensured that we knew our costs and what type of volume we needed in order to operate at a profit.
After the recession of last year, we are now in a much stronger position. First of all we are established in the ‘airport transfer’ market so people know we are reliable and reputable (the growth we have had in the last five years speaks for itself). Secondly, we deal with high volume so a lot of our airport transfer journeys link-up (this gives us economies of scale). And finally, our on-line booking and management system delivers such a saving on conventional office based overheads, we are way ahead of our competition.
In short, although the increased costs of fuel, parking and licensing are significant, there is comfort in the knowledge our competitors are facing the same challenges. There is also a lot of excitement in the fact we can really shine as an efficient company and offer so much more to our own – and our competitors - customers.
Thursday, 11 March 2010
Transition
Welcome to my first ever blog.
It seems a good time to start a blog because there is so much going on right now that is easy to talk about. Take for instance the recession of last year and how it really made me focus on who our customer is and what is our niche in the market place.
I came to realise that in the past we have maybe had the mindset of a smaller, sole-trader business and we have been competing on the merits of a sole trader. By that I mean we sold what was good about a sole-trader.. For the customer, they always get to talk to the decision maker, they get to know you personally and build an ongoing relationship with a high degree of familiarity. For us, we get to know the customer too and understand the way they work much better.
What happens though when you want to grow your business and make it more professional. How do you start to differentiate yourself from your competitors and deliver a better level of support to your customer. Well, how about looking at the benefits you give as a bigger company while still holding on to the best bits of being a sole-trader.
How about offering a 24-hour support telephone number. How about reassurance that you are not the only driver and will be out working all sorts of silly hours. How about taking more time to listen to your customer and understanding what else you can do to help them. Last year we introduced an on-line booking system that handles our information in a very efficient manner. It gives us the ability to manage our business in a way that a sole-trader could only dream of.
What we haven't done though is find a way of showing new customers just how good the system is and how much extra support it gives a corporate client. Anyway, in order to achieve this, we are currently investigating branding and how to convey our message in a different way. A way that is more reliable and easily understandable by a customer.
I came to realise that in the past we have maybe had the mindset of a smaller, sole-trader business and we have been competing on the merits of a sole trader. By that I mean we sold what was good about a sole-trader.. For the customer, they always get to talk to the decision maker, they get to know you personally and build an ongoing relationship with a high degree of familiarity. For us, we get to know the customer too and understand the way they work much better.
What happens though when you want to grow your business and make it more professional. How do you start to differentiate yourself from your competitors and deliver a better level of support to your customer. Well, how about looking at the benefits you give as a bigger company while still holding on to the best bits of being a sole-trader.
How about offering a 24-hour support telephone number. How about reassurance that you are not the only driver and will be out working all sorts of silly hours. How about taking more time to listen to your customer and understanding what else you can do to help them. Last year we introduced an on-line booking system that handles our information in a very efficient manner. It gives us the ability to manage our business in a way that a sole-trader could only dream of.
What we haven't done though is find a way of showing new customers just how good the system is and how much extra support it gives a corporate client. Anyway, in order to achieve this, we are currently investigating branding and how to convey our message in a different way. A way that is more reliable and easily understandable by a customer.
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