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Federal Express Improves Customer Service

through Performance Management

Prior to 1989, Federal Express (FedEx) assumed that on-time delivery was what its 

customers expected and valued most; however, input from customers showed that 

customers expected much more. In an effort to spur progress toward their ultimate target 

of 100 percent customer satisfaction, FedEx developed a 12-component index, known 

as the Service Quality Indicator (SQI). The SQI includes measures for on-time delivery 

but also other indicators of quality service such as complaints, lost packages, and 

damaged goods. SQIs form the basis on which corporate executives are evaluated and 

individual performance objectives are established and monitored. Since being placed 

in service in the late 1980s, the SQI has enabled FedEx to increase its on-time delivery 

performance from 95 percent to 99.7 percent in 2003 without adding significant costs.

> Direct the best 

mix of investments

> Provide transparency 

to the public and 

accountability to 

public officials

> Evaluate how well past investments worke

> Understanding

where the problems are

With increased public scrutiny of agency actions and limited funding, effective allocation of resources is imp

Establishing an operations performance measurement program supports this goal in several ways:

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inputs that can and should be used to establish priorities.

Applying performance management principles to operations 

will help improve the effectiveness of operations programs. 

Traditionally, a lot of planning and analysis goes into the frontend of projects, they are implemented, but we rarely go back 

to see how they perform. In a customer-focused environment, 

however, it is critical to evaluate constantly how well services 

are being delivered, and to devise ways to improve delivery. 

A performance management approach enables us to not 

only detect problems but also to learn from our successes 

and failures in dealing with them. It also provides an early 

warning of emerging problems. Making more effective 

investment decisions is even more critical today because of the 

strained financial environment transportations agencies face.

The private sector has been successfully managing their 

businesses by tracking performance of their services, 

evaluating whether particular strategies worked well, and 

sending funding to those activities that have produced the best 

results. More recently, public agencies have begun to apply 

this performance management approach to their services. 

How the City of Bellevue, Washington Justified 

Staff Increases with Performance Data

The City of Bellevue, Washington, used emergency medical response time data to garner city 

council approval for an increase in staffing at one of the City’s fire stations. The City Manager’s 

office and fire department presented the council with detailed performance data regarding 

response time and staffing for fire stations across the City. The data showed slower response 

time from call entry to arrival on-scene for one geographic area of the City. Using performance 

measurement data, city staff determined – and explained to the City Council – that the addition 

of eight firefighters would allow the fire department to staff an additional dedicated two-person 

aid unit on a 24/7 basis – greatly decreasing the risk of a fire station being without a crew.

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Evaluating Performance: 

Ramp Metering in Seattle

An illustration of the benefit is the improvement of speeds 

on the exit ramp from northbound I-5 to U.S. 2. The 

average speed after the projects were complete was very 

close to free-flow (42 mph, as dictated by the curvature 

of the ramp) for the entire evening peak period.

travel time reliability – has been recognized as a serious 

problem. Reliability describes how congestion varies over 

time; because disruptions and demand are never constant 

from day to day (a severe incident may happen one day, 

the next day may be incident free), congestion also varies.

y 

• Weather – How long did it take t

ice covered roadways after the p

How many weather-related crash

How many severe weather events 

• Arterial Control – How many sig

Finally, we operate the transportation s

to improve our customers’ experiences. 

satisfaction of our customers is a key co

operations performance measurement 

Travel Time Reliability: Congestion is different every day 

because of disruptions like incidents and bad weather. 

Operations deals with these disruptions directly.

2003

Weekday, 5:00-6:00 p.m. on State Route 520 Eastbound, Seattle, WA

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is part of the learning process for operational performance management. Continuous 

Performance M

How We Op

Evaluating Performance: 

Reducing Clearance Time for 

Large Truck Incidents in Atlanta

In 2006, Georgia’s Traffic Incident Management 

Enhancement (TIME) Task Force developed a Strategic 

Vision of initiatives to improve TIME services in Metro 

Atlanta. One of several high-priority recommendations 

in this Vision was to quickly and safely remove large 

vehicle crashes from the roadways in a timely manner. 

The Georgia Towing and Recovery Incentive Program 

(TRIP) program was developed as part of this Strategic 

Vision. TRIP is a recovery incentive program that pays 

heavy-duty recovery companies a monetary bonus 

for clearing commercial vehicle crashes quickly in an 

attempt to meet a goal that all incidents be cleared 

within 90 minutes. The program was initiated in 2008. 

By using data already being collected on incident 

management activities, the positive effect of this policy 

on incident impacts was easily documented.

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and increasing communication reduces user delay costs.

Project Description: Michigan DOT formed a 

partnership to implement the following:

• Set travel time goals, measures, and strategies 

to account for work zone performance.

• Increase collaborative effort with emergency 

responders and snow plow operators.

• Use traffic data and performance management 

software to measure program results.

• Increase communication clarity, 

consistency, and frequency to public.

“Heat Map” Showing Congested Areas of I-94

Results: MDOT developed an operations performance measurement system using travel time, incident, and w

system allows them to conduct a variety of useful analyses:

• User delay costs from work zones, incidents, and weather events reduced 25 percent year to date for t

under study.

• Bi-weekly meetings and communication efforts have increased collaboration among partners.

• Work zones in corridor are coordinated and procedures have been standardized.

• Travel time and other performance metrics are measured and analyzed using new accountability and r

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operation program, either part of a formal strategic 

planning process or by consensus of stakeholders.

• Identify the initial set of performance measures 

to be used. The literature on this subject 

contains a wide variety of both outcome and 

activity measures from which to choose.

• Develop a Data Business Plan for collecting, 

managing, analyzing, reporting, and disseminating 

data to support the performance measures. 

Look for opportunities for multiple uses of the 

data beyond performance measurement, such 

as for model inputs. Assign responsibility for 

governance of the data, including: oversight, 

the party responsible for maintaining the 

data archive, and funding requirements.

• Develop reporting formats and publication frequencies 

to satisfy the stakeholders for operations 

performance measures.

• Routinely evaluate the performanc

completed congestion mitigation 

using the data and performance m

already identified. Report success

understand the conditions that led 

• Develop a formal process for rout

performance. Understanding why 

trends emerged is key to this proc

can be done initially through discu

field managers but may eventually 

instituting new performance meas

With the fiscal and environmental const

transportation agencies in adding new 

the time has come to maximize the effic

system with operations. Effective opera

monitoring the performance of the syste

making adjustments to operations strate

measurement is the engine that drives e

How to Report Performance

In addition to evaluating specific projects, mobility, and congestion performance should be routinely reporte

Observing trends is a useful way of identifying problems and assessing the effectiveness of overall programs

Congestion Management Process (CMP) used by metropolitan planning organizations requires that perform

related to the original goals set for the community. Operations performance measures should be an integral 

Many agencies have started to produce periodic performance reports. The links below provide examples. 

Because this is a new concept, some experimentation in graphical design and reporting formats is desirable. 

http://www.wsdot.wa.gov/accountability/GrayNotebook.pdf 

http://www.grta.org/valentin/2010_Transportation_MAP_Report.pdf

http://www.mwcog.org/transportation/activities/congestion/default.asp 

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• For more information on this report, contact Rich Taylor:

rich.taylor@dot.gov

• Visit the Operations Performance Measures web site for more inform

http://www.ops.fhwa.dot.gov/perf_measurement/ind

• For more information on Planning for Operations, visit:

http://www.plan4operations.dot.gov/

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