Standards should be objectively measurable, so that performance can be audited effectively, and provide a sound foundation for Asset Management. The term "Levels of Service" is used extensively in asset management planning as it enables a range of performance to be measured and recorded. The basic system uses five grades which are generic and should not be amended:
Grade 1 represents the aspiration that the organisation seeks to provide; grade 2 or grade 3 is normally equivalent to the defined standard and grade 5 is formulated to represent the worst performance in the current provision of a service. An example would look like this:
Grade 1 - excellent: 100% compliance with zero failures;
Grade 2 - good: 98% compliance;
Grade 3 - adequate: better than 95% compliance;
Grade 4 - poor: less than 95% compliance;
Grade 5 - awful: less than 80% compliance;
Whilst the basic 1 to 5 grading system is always unchanged, the detail is tailored to both the particular industry and the local circumstances. Here's a further example based on airline baggage:
Grade 1 - excellent: 100% of passengers arrive with accompanying luggage;
Grade 2 - good: at least 99.5% of passengers arrive with accompanying luggage;
Grade 3 - adequate: at least 99% of passengers arrive with accompanying luggage;
Grade 4 - poor: less than 99% of passengers arrive with accompanying luggage;
Grade 5 - awful: less than 95% of passengers arrive with accompanying luggage;
Obviously the numbers will differ according to the sophistication of the airline and its passengers expectations but the principle remains the same. The levels of service, which are defined, all describe particular outcomes from the customers point of view - they do not refer to mechanical issues such as the output of a pump or the number of times the baggage handling systembreaks down. Each and every aspect of a business should be assessed to determine which of its functions are appreciated by its customers and those identified should all be included in the defined LoS. In certain circumstances it may be necessary to define internal customers in order to break down the supply chain but these measures would normally only be used within the business. Where there is a lack of concrete issues, it can be appropriate to use satisfaction as the measure, based on a customer survey:
Grade 1 - excellent: 100% of customers record complete satisfaction;
Grade 2 - good: more than 95% record complete satisfaction;
Grade 3 - adequate: more than 90% record complete satisfaction;
Grade 4 - poor: less than 90% record complete satisfaction;
Grade 5 - awful: less than 80% record complete satisfaction;
There is no industry or organisation which cannot be assessed and have its LoS set up in a methodical manner. The key is in being able to use objective criteria to define the standard and then the resulting levels of service which must provide a meaningful measure of the business outputs.
