Biffa fuels Sainsbury's power needs with added BI goodness

Profile picture for user jtwentyman By Jessica Twentyman July 23, 2014
Summary:
Waste management and recycling company Biffa uses management information to help the likes of Sainsbury's individual depots operate more competitively in a price-sensitive market.

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This week, a Sainsbury’s supermarket in Cannock, UK became the country’s first major retail outlet to leave the National Grid for its day-to-day energy consumption. From now on, its needs will be powered by food waste alone.

Leftover products from the chain’s stores around the country will be transported to a nearby processing plant and turned into biomethane gas by anaerobic digestion. This gas, in turn, will be used to generate electricity, which will be supplied directly to the Cannock branch of Sainsbury’s via a 1.5 kilometre cable.

The company supplying this service to Sainsbury’s is Biffa, a waste management and recycling services company that collects and processes some 7.25 million tonnes of Britain’s waste each year.

It may not be the most glamorous of industries, but it’s a vital one, say Biffa executives. They have a point. The UK’s traditional management route for waste - landfill - is running out fast and was never very environmentally friendly to begin with. The regulatory landscape is constantly evolving. New and better ways for dealing with waste are urgently required.

The trouble is, customers are too easily led by price. When a business or a local authority comes to the end of a waste management contract, it’s often persuaded to switch to the company that offers it the cheapest deal.

So how does a company like Biffa differentiate itself on service, while keeping a keen eye on the profit margin to be had from each customer it serves? And how, in such a price-sensitive market, does it continue to attract high-profile contracts like the one with Sainsbury’s, or the ten-year, £50 million deal it won with Epping Forest district council this week?

The answer lies in good business intelligence tools, according to Laura Lewis, manager of management information at Biffa.

But first comes a huge data collection exercise:

Every time we pick up a bin from a customer, we weigh that bin. That’s done through a PDA [personal digital assistant] device that each driver has in their truck. We take all that data and record what contract it was against, the kind of waste, the quantity.

And if there’s any reason we can’t pick up that bin - the bins aren’t there to be collected or a car is blocking access to that bin - then that reason will be recorded in the data warehouse, along with a link to a photo taken on the PDA, where necessary, that shows the problem.

All this data is kept in a Microsoft SQL Server database. Tools from BI company Microstrategy, meanwhile, are used to extract it in various forms, from daily volume reports for the company’s executive committee, released at 3am each day, to dashboards for managers at the company’s 65 depots across the country.

Recently, it is this latter group that has benefited the most from Biffa’s evolving BI capabilities, Lewis says:

Before, they were Excel factories, all producing their own management information, some better than others.

What was needed was a way to display consistent KPIs [key performance indicators], and measure each of the company’s depots against these:

so [managers] knew what good looks like within our business - and what bad looks like, too.

Static reporting

Until recently, these performance metrics could only be communicated to local managers through static reports showing historical data. Taking it to the next level involved the creation of a more dynamic ‘Depot Dashboard’. The beauty of this approach is that depot managers can view recent data and drill down to the next level, to see it by collection truck, by customer type and so on. At the deepest level, they can see the right down to the level of the reference number of each and every collection their depot has handled.

So what actions does that enable depot managers to take? “If they’re not hitting their sales targets, for example, they can see where the problems lie, in terms of which customers, which routes, which areas of town, and so on.”

Operational statistics focus on wasted journeys, for example, and pick-up rates, says Lewis:

It drives behaviour that, for our customers, improves their experience with Biffa. It’s only by having a strong, solid base of loyal customers, satisfied with the service that we give them, that we can be confident that customers won’t walk out the door in search of a cheaper service.

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No, she's not real, but the BI gains are

The Depot Dashboard was launched to the user community in February 2012. Adoption, at first, wasn’t particularly good, Lewis admits:

But one thing we did was to act on anecdotal evidence that the dashboard was taking too long to load. We figured out that, if users were already uncomfortable using a new tool, then that would be the perfect excuse not to use it.

We looked at the optimisation. We’d built the dashboard as four separate components.

By splitting those components out into four different dashboards, but keeping the same look-and-feel between each dashboard using Microstrategy’s hyperlinking capabilities, Lewis’s team were able to solve the problem:

From a user perspective, the workflow didn’t change - but it also allowed us to track which sections [users] were using more frequently and to better effect.

As a result of their efforts, Biffa has gone from 20 to 30 logins per month when the Depot Dashboard first launched (“soul-destroying”, says Lewis), to over 600 per month today.

And because there’s a balanced scorecard approach taken here, depot managers can easily make comparisons between their own depots and others. It’s engendered a healthy sense of competition in the business, she adds, “and the standard deviation is shrinking, which is what we want to see.”

At the moment, depot managers can’t see the profitability of individual customers: those views are, as yet, only available to staff in finance - so depot managers rely on accountants to provide those views, via reports, when they request them. But a new project is about to start to give Biffa’s Depot Dashboard that P&L perspective.

That’s a priority, says Lewis, because as well servicing nationwide corporate accounts, depots are individually responsible for their SME customers. In other words, they set the prices for smaller customers, delivering the services and managing the margins that result.

Off the back of that, Biffa’s launching a ‘Depot of the Year’ competition, with categories based on depot size. This will run over the current financial year, which runs April to March, and in Spring next year, there’ll be an awards ceremony.

That’s likely to generate a lot of interest in the business, and particularly among business divisions that don’t yet have access to the dashboards - so Lewis is hard at work on building the business case for getting the funding and headcount needed to keep up with the anticipated demand.

The expansion project will still involve dashboards, but for the municipal division, for example, which deals with household collections on behalf of local authorities. Lewis adds:

We also have a huge focus from consumers - like Sainsbury’s customers, for example - on our green credentials and BI will be key here,” she says. “It’s what will allow us to show where their waste goes and how we’re the best company to deal with it responsibly.

In the UK, there’s a saying: “Where there’s muck [waste], there’s brass [money].” At Biffa, BI is showing company managers the very best ways to work that mysterious alchemy.