In this video tutorial, accounting professor Kay Stice focuses on developing the second key performance indicator (KPI) for a trucking company. He explains the process of developing the KPI billable miles per tractor per day. He also offers some strategies for leading measures for how to reach this goal by members of an executive team.
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- So we're still at the daily 8 a.m. meeting…of the CEO and top executives of XYZ Trucking.…We are looking at four key performance indicators,…or KPIs.…First measure: Driver turnover.…The second measure is billable miles…per tractor per day.…So this is the total number…of revenue miles driven yesterday…divided by the total number of tractors in our fleet.…By the way, in the trucking business,…the tractor is the front part where the driver sits.…And the back part where the load is…is called the trailer.…
Now notice that we are counting only billable miles.…Driving a truck empty to get back to an XYZ Trucking base…doesn't earn us any money.…And also, we are counting all tractors,…including those that are currently down for repairs.…All tractors.…Our goal for this number is 650 billable miles…per tractor, per day.…And this is a pretty aggressive goal.…Have you ever driven 650 miles in a day?…In order to reach this goal,…XYZ Trucking must have its tractors in good repair,…and the jobs scheduled very precisely…so that when one driver finishes a trip,…
In this course, accounting professors Jim and Kay Stice explain what KPIs your business should consider in a balanced scorecard, from financial goals to employee and customer satisfaction. They describe how to craft a clear mission statement that complements your KPIs, and how to tie performance to incentives. Plus, get a look at KPIs in action, as Jim and Kay break down a case study examining a trucking company's balanced scorecard.
- The importance of KPIs and measuring performance
- Financial goals and measure
- Customer needs and satisfaction
- Employee growth
- Creating an effective mission statement
- Linking measurements and rewards
- Examining a KPI case study