Benchmark Improvement Process

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Description

Benchmark Improvement Process

FY 04
Executive Summary
for
US Army MWR Region Chiefs

April 2005






US Army Community & Family Support Center
Business Programs Directorate
CFSC-BP
4700 King Street
Alexandria, Virginia
22302-4404







Executive Summary
Benchmark Improvement Process



This is an Executive Summary to complement the annual “Benchmark Report – An
Indication of Key Performance – FY 04”. Together, these reports have the
potential of providing a high level of assistance to the Regions, Installation
Commanders, and activity managers, by detailing where each facility/operation
falls financially in comparison to their brethren operations.

According to Robert Camp, Ph.D., the originator of the benchmarking process, two
of the five key benchmark areas (his Number 4 and 5) are to “analyze the gap
between what you do and what the sum of the practices would say you should look
like” and “revise your internal performance measurements and goals”. Neither of
these was effectively being accomplished in our Annual Reports.

For the key indicators presented, this report shows what would have happened had
the benchmarks been met, the specific targets for each area, and the potential
increase in NIBD that would have occurred had the benchmarks been met (or
implemented as a goal). This goes a long way toward meeting the two key areas of
Dr. Camp’s process that were not fully implemented. Regions, Commanders, and ...

Sujets

• Improvement District No. 4
• Fyrkat
• Army Black Knights
• La Mascotte de l'armée
• Falcons de Bowling Green
• Management

Informations

• Publié par: Fusec
• Nombre de lectures: 85
• Langue: English

Extrait

US Army Community & Family Support Center

Business Programs Directorate

CFSC-BP

4700 King Street

Alexandria, Virginia

22302-4404

Benchmark Improvement Process

FY 04

Executive Summary

for

US Army MWR Region Chiefs

April 2005

Executive Summary

Benchmark Improvement Process

This is an Executive Summary to complement the annual “Benchmark Report – An

Indication of Key Performance – FY 04”.

Together, these reports have the

potential of providing a high level of assistance to the Regions, Installation

Commanders, and activity managers, by detailing where each facility/operation

falls financially in comparison to their brethren operations.

According to Robert Camp, Ph.D., the originator of the benchmarking process, two

of the five key benchmark areas (his Number 4 and 5) are to “analyze the gap

between what you do and what the sum of the practices would say you should look

like” and “revise your internal performance measurements and goals”. Neither of

these was effectively being accomplished in our Annual Reports.

For the key indicators presented, this report shows what would have happened had

the benchmarks been met, the specific targets for each area, and the potential

increase in NIBD that would have occurred had the benchmarks been met (or

implemented as a goal). This goes a long way toward meeting the two key areas of

Dr. Camp’s process that were not fully implemented. Regions, Commanders, and

activity managers no longer have to pull out calculators to determine the impact on

their operations if the benchmarks were met and can easily establish departmental

specific goals to meet these important benchmarks.

We expect that if this report is used as intended, it will assist in improving the

financial performance of our many and varied programs.

TABLE OF CONTENTS

Benchmark Improvement Process Methodology - Sample

1

Summary Results of BIP (FY 04)

3

Golf Program

4

Army Golf Best Practices

5

Army Golf Benchmark Data & Results

6

Bowling Program

8

Army Bowling Best Practices

9

Army Bowling Benchmark Data & Results

10

Food & Beverage Program

13

Actual F&B NIBD by Region

15

F&B Best Practices

16

Snack Bar Benchmark Data & Results

17

Dining Benchmark Data & Results

22

Regular Bar Benchmark Data & Results

26

Catered Food Benchmark Data & Results

32

Benchmark Improvement Process Methodology

- Sample -

We added three columns to the data that is contained in the basic Annual Benchmark Report.

The added

columns are to the right of “Ranking” on the facing page.

These columns effect the implementation of

Dr. Camp’s 4

th

and 5

th

Key Benchmarks at the Installation level and the 5

th

at the Region/Army level as

well.

Please note that the sample information is to illustrate the methodology used and is based on current

year data.

Camp’s 4

th

Area is to “analyze the gap between what you do and what the sum of the practice

would say you should look like.”

Though these numbers are divinable in the current annual

benchmark report, it involves the stubby pencil approach.

The column “Difference Bench to

Actual” is the results of subtracting the Total Rounds Played from the Rounds Played

Benchmark.

The Average Green Fees Per Round column is pulled from the Annual Benchmark Report,

and is the mathematical results of dividing total green fees income by the number of rounds

the installation reported as being played.

Camp’s 5

th

area is to revise the “internal performance goals” based on the results of

benchmarking.

The 3

rd

column does this.

It reports the actual increase in NIBD that would

result if the Rounds Played (RP) Benchmark had been met, and this should become the basis

for the performance goal of the operation.

Example:

Using Baumholder, the first installation on the list.

It shows that the “Difference Bench to

Actual” is 3,884 Rounds played.

In other words, the “gap” between what they do, and what they should

do, is 3,884 Rounds.

Therefore Baumholder should revise their “internal performance goals” by

increasing rounds played by 3,884 rounds.

Using Baumholders Average Green Fees Per Round of $13.63, one can calculate the impact on the bottom

line for this activity if the installation had met the benchmark.

In this case, it would have produced an

additional $52,920 in NIBD.

The potential increase in NIBD in FY 03 if all Army golf operations had met this Benchmark is of

particular interest:

$8,661,686

.

More than double the current reported NIBD.

The adoption of the Benchmark Upgrade Process creates a real benchmark that is useful by the Regions,

Commanders, and Managers, to determine specific areas to target for the specific listed action, without

requiring users to pull out pencils, calculators, and spreadsheets.

Again, not all Potential Increases in NIBD shown in this Report are attainable.

That’s why this Report

should be used as a tool, not a weapon.

With the large number of activities the Army has, local

conditions, such as weather, base security, diversion of the facility, one-time problems, etc., can result in

the Benchmark not being attainable.

Even if it’s not, at least, with adequate verification, the reason for

the non-attainment becomes a known element of the operation, either as a one-time affect, or continuous.

1

Rounds Played

Benchmark Improvement Process

- Sample -

2

SUMMARY RESULTS OF

BENCHMARK IMPROVEMENT PROCESS

The table below shows the totals of all the Benchmark Improvement Process Potential NIBD

increases, from all the sheets that follow in this report.

Even a quick look at this table reveals that

huge potential increases in NIBD are available from all programs.

Remembering that the

Benchmarks are set at an industry accepted number, an Army average, or at the 25

th

Percentile,

there are numerous activities already meeting or exceeding the Benchmarks.

If the benchmark is

based on an Army average, 50 percent of the activities already meet or exceed that benchmark.

It

therefore becomes harder to rationally accept statements that it can’t be done.

Money remains tight in the MWR world.

Decreasing dividends from AAFES, reduced

appropriated funds for MWR, additional security constraints on programs, and deployed troops,

are all factors which contribute to increasing the difficulty our programs have in generating the

much needed earnings.

It is time for the Army, Regions, Commanders, and Managers to take a

serious look at the results of their operations and to adjust the programs to meet as many of the

Benchmark targets as are possible and practical.

Closing facilities should be the last resort.

Summary Results

Note:

Current total program NIBDs above will not equal the Army-wide SMIRF numbers, as adjustments were required for

the Benchmark Improvement Process purposes, such as non-reporting installations, missing data, etc.

3

Golf Program

Benchmark Improvement Process

As the Golf Program Benchmarks includes data on patron usage (daily rounds played, annual green fee

rounds played, etc.) that are not available in the other program areas, we are able to report on six

Benchmark areas for golf.

Food & Beverage departments at golf facilities are in the Food & Beverage

section of this report.

The table shown below displays the top and last row of the chart on the following pages and highlights the

Army-wide impact of these six benchmarks.

For example, the Column labeled “Increased NIBD if DG (Daily Green) Fees Equals Benchmark”, shows

that the average daily green fee for the Army in FY 04 (after adjustments for outliers) was $20.25 per

round played.

If all Army golf courses that charged less than $20.25 per round played, charged this

amount, an additional $4,998,495 in NIBD for Army Golf would have been produced.

The largest increase in NIBD would occur if golf courses met the Rounds Played Benchmark (70.0

percent).

Using each installations actual Average Price Per Round (not the higher benchmark amount), if

all listed met the Benchmark for Rounds Played, the NIBD for Army Golf would rise from $11.0M to

$18.3M ($11.0M current NIBD plus $7.3M from meeting the Rounds Played Benchmark).

The “lowest”

increase in NIBD would occur if all activities with Pro Shops met the COGS Benchmark, which is based

on the Army average of 72 percent.

As you peruse the sheets with all the installations listed, you will see that many programs are doing

great!!

Those with numbers under each benchmark column that are colored “green” have less than a 5

percent deviation from current NIBD.

In other words, those facilities, while not exceeding the

benchmarks, a change to equal the benchmark would have a small dollar or percentage impact on their

overall NIBD.

Numbers in “yellow” have a 5-10 percent increase potential on NIBD, and those in “red” are costing

themselves 10 percent or more of their current NIBD, by not adjusting their programs to meet the stated

benchmarks.

Highlights of Golf Benchmark Improvement Process

Garrison Name

NIBD

NIBD %

Increased NIBD

if DG Fees

Equals

Benchmark

Increased

NIBD if AG

Fees Equals

Benchmark

Increased NIBD

if RP

Benchmark Met

Increased NIBD

if Non-Maint.

Labor is at

average

Increased NIBD

if Pro Shop

COGS Equal

Average

Increased NIBD

if Total Maint.

Exp. Per Hole

Equals

Benchmark

$20.25

$15.00

70.0%

20.0%

72.0%

$25,000

ARMY BENCHMARK

$11,012,558

16.1%

4,998,495

$

3,432,242

$

7,252,619

$

994,278

$

242,744

$

4,163,363

$

21,083,740

$

32,045,350

$

BENCHMARKS

Overall

Potential

Increase

NIBD

Total

Potential

NIBD

4

FY 04 ARMY GOLF

BEST PRACTICES

o

Strive for operational and financial efficiencies to achieve the MWR Board of Directors’

NIBD standard of 20 percent of net revenue for FY 05.

o

Spend no more than 46 percent labor.

Review maintenance practices to ensure

expensive labor intensive operations are performed in the most efficient manner.

o

Open the courses for play by the general public or local veterans where excess capacity

exists.

o

Review hours of operation to best meet customer demand.

Reduce hours where

appropriate to avoid excess labor charges with minimal revenue being generated.

o

Control overtime costs.

o

Review quantity and quality of pro-shop stock to maximize profitability and to ensure that

idle cash is not tied up in inventory.

Strive for inventory turnover of at least 2.5 turns to

ensure inventory is not on the shelf greater than 150 days before selling.

o

Develop an operational plan to incorporate the influx of women and junior golfers into

your program.

Institute a transitional plan to develop the new golfer from lessons/driving

range to an on-course environment.

o

Enhance golf operations by reviewing course maintenance practices and eliminating non-

value added practices such as maintaining roughs to fairway standards.

5

FY04GOLF

GarrisonName

NIBD

NIBD%

IncreasedNIBDif

DGFeesEquals

Benchmark

Increased

NIBDifAG

FeesEquals

Benchmark

IncreasedNIBD

ifRP

BenchmarkMet

IncreasedNIBD

ifNon-Maint.

Laborisat

average

IncreasedNIBD

ifProShop

COGSEqual

Average

IncreasedNIBD

ifTotalMaint.

Exp.PerHole

Equals

Benchmark

$20.25

$15.00

70.0%

20.0%

72.0%

$25,000

Columbus,OH(DSCC)

$5,758

3%

22,606$

43,539$

29,811$

10,127$

-$

-$

106,083$

$111,841

Susquehanna,PA(DDSP)

($41,037)

-13%

3,078$

14,299$

112,373$

33,448$

-$

-$

163,198$

$122,161

DLATOTALS

($35,279)

-7%

104thASGHanau

$263,696

20%

1,120$

-$

-$

-$

21,060$

35,375$

57,555$

$321,251

104thASGHanau

$87,773

19%

27,138$

-$

33,692$

761$

18,041$

-$

79,632$

$167,405

98thASG-Wuerzburg

$16,598

11%

18,276$

64,444$

116,035$

4,176$

4,321$

-$

207,253$

$223,851

6thASGEUCOM

$272,270

24%

-$

25,498$

6,202$

9,860$

-$

-$

41,560$

$313,831

26thASGHeidelberg

$265,599

19%

-$

-$

305,194$

-$

19,086$

3,614$

327,895$

$593,493

EUROTOTALS

$905,936

20%

KoreaArea4MWR

$879,327

49%

-$

-$

-$

-$

-$

330,957$

330,957$

$1,210,283

KoreaArea2MWR

$1,884,991

31%

-$

-$

-$

2,950$

12,102$

1,475,531$

1,490,582$

$3,375,573

KoreaArea1MWR

$255,185

25%

-$

-$

-$

46,450$

1,886$

12,144$

60,480$

$315,665

KoreaArea1MWR

$203,834

19%

-$

-$

-$

44,725$

-$

29,075$

73,800$

$277,634

KOROTOTALS

$3,223,337

32%

AberdeenProvingGround

$41,641

5%

107,219$

80,786$

37,778$

13,068$

11,626$

-$

250,478$

$292,119

AberdeenProvingGround

($7,912)

-94%

26,586$

185,190$

-$

5,516$

-$

-$

217,292$

$209,381

Ft.Monmouth

$79,520

7%

13,667$

-$

76,385$

-$

658$

289,731$

380,441$

$459,960

PicatinnyArsenal

$87,908

9%

-$

-$

148,035$

-$

1,163$

113,905$

263,103$

$351,011

Ft.Dix

$14,468

2%

2,553$

68,631$

74,295$

21,235$

-$

16,048$

182,763$

$197,231

USMA(Installation)

$186,162

18%

-$

5,638$

120,544$

6,454$

-$

23,443$

156,079$

$342,241

Ft.Belvoir

$96,344

3%

50,750$

-$

249,757$

143,888$

-$

187,992$

632,386$

$728,731

Ft.Belvoir

$233,613

39%

106,348$

67,755$

-$

4,770$

-$

-$

178,873$

$412,486

Ft.Meade

$168,058

6%

35,300$

62,912$

38,550$

52,019$

-$

250,466$

439,246$

$607,304

CarlisleBarracks

$135,220

16%

99,538$

130,808$

-$

4,717$

6,685$

-$

241,749$

$376,969

Ft.Eustis

$23,247

2%

93,564$

97,754$

-$

14,796$

-$

68,839$

274,953$

$298,200

Ft.Lee

$216,337

18%

115,135$

110,975$

148,403$

3,322$

3,518$

-$

381,353$

$597,689

NEROTOTALS

$1,274,607

9%

SelfridgeANGB

$165,163

23%

77,495$

73,920$

20,675$

11,594$

-$

-$

183,684$

$348,847

Ft.Carson

$89,205

7%

150,827$

-$

63,439$

-$

4,126$

109,080$

327,472$

$416,677

Ft.Lewis

($127,359)

-9%

-$

67,664$

591,750$

53,978$

18,406$

94,596$

826,393$

$699,034

Ft.Riley

($41,804)

-18%

63,168$

4,613$

186,279$

8,341$

-$

-$

262,402$

$220,598

DugwayProvingGround

$9,220

22%

-$

7,515$

181,686$

3,183$

-$

-$

192,383$

$201,604

Ft.Leavenworth

($17,010)

-2%

26,343$

-$

194,526$

11,893$

-$

-$

232,761$

$215,751

Ft.LeonardWood

($75,006)

-12%

33,181$

52,316$

194,499$

24,861$

17,819$

-$

322,677$

$247,670

NWROTOTALS

$2,409

0%

BENCHMARKS

Overall

Potential

Increase

NIBD

Total

PotentialNIBD

6