A Catalyst for Supply Chain Profitability

Commercial Driver Management Program: An ROI Model

Following up on my 2020 vision theme, I am going to address a few of the "Top 10 Fun" elements from my previous blog post Top 10 for 2020

By far and above, the most active part of my portfolio of services for the last 12 months has been the Safety & Compliance portfolio for transportation providers. Driven in part by the #1 of my Top 10 - trucking insurance in the current hard market.   Given that, at least for the next few months, my blogs will be leaning towards this area in an attempt to provide guidance for my existing clients and anyone else who may be faced with the same or similar challenges.

A lot of clients are struggling with issues revolving around insurance, CVOR scores, attracting and retention of drivers, and employee - particularly driver - morale.  When I complete a company survey, it is frequently apparent that there is a poor foundation laid when it comes to managing, developing and retaining drivers, as well as the training of support staff in driver-centric activities. I am, for instance, amazed at how few companies have job shadows between drivers and admin staff - each shadowing the other's tasks, and getting to know who they work with every day, what they do, and how each other's performance affects the others job function. Given the absence of any formal program to introduce, develop and manage drivers as a part of the overall company culture it isn't surprising that this component (the driver program) is not functioning at optimal levels. 

It has proven difficult for me to explain in words how a quality Driver Management Program will bring the organization a multitude of benefits and provide positive financial returns over time. In an effort to address this shortfall in my verbal presentation skills,  I have developed the infographic below. Hopefully, this will provide some insight.

This visual aid outlines how a Driver Management Program returns positive financial rewards to the organization.  Not connected to the financial improvement icon is the Positive Reputational Account icon on each side of the graphic. This is done partly for esthetic reasons - it looks crowded and hard on the eyes if those connections are mapped - and partly because the reputational account accrues financial returns in the form of "Goodwill" - which is an accounting phrase for the attractiveness of your product or service to the market. Apple has a high reputational account - its brand is well known, has a high profile and dedicated customers who are willing to pay a premium, compared to other comparable products in the marketplace, for the Apple brand.  This is a real and valuable commodity, but not easily assigned a specific value. The company accountant will determine the value at specific intervals and record it on the corporate balance sheet.   I have always been partial to strong balance sheets. Banks like them. All the rest of the positive returns impact the income statement. So they can be measured (using Key Performance Indicators, or KPIs) by those who have the budgetary responsibility for the department involved. 

Reputational Capital is an asset every business should want to proactively grow. "Reputational Capital is a corporate asset that can be managed, accumulated and traded in trust, the legitimisation of a position of power and social recognition*, a stronger willingness for the shareholders (public) to maintain belief in the organization in times of crisis." From my page on  Reputational Capital

Roi Infographic

If you are interested in exploring how a Commercial Driver Management Program can improve your financial performance, reduce driver turn over, lower accident rates, improve morale,  AND introduce reputational capital benefits to your organization, then please drop me an email at the address provided. If you would like to have the tools to sell a comprehensive driver program to your senior management based on a positive Return On Investment approach, then you are just a click away. 

Safety is an investment that repays dividends over the life of the company. And as you can see from this infographic, the effects are compounded - both sides of this output equation deliver on reduced insurance premiums and increased reputational capital accounts.  Interested? Send me an email and let's start a dialogue.  rickm@sclinksconsulting.com

Stay tuned for more commentary on my Top 10 for 2020.