A pilot project to monitor fuel use has revealed how Ricoh could slash its fuel spend by nearly 15%, bringing savings in excess of £350,000 a year.

The company was looking to tackle an annual fuel bill of almost £2.35 million from its fleet of 800 vehicles.

Its issue was a lack of management control over fuel reporting. Ricoh didn’t know where its money was being spent, despite using fuel cards.

“We had a fair amount of historic data, yet not sufficiently detailed and consolidated information that we could make informed judgements with,” says Leanne Smart, Ricoh’s fleet manager.

“We knew what we needed was there, but getting it all into a useable format was a big undertaking and one that would need expertise.”

The solution saw the document management solutions provider pull together a project team that initially included its fleet team and the consultancy services division of its primary leasing provider LeasePlan.

The project team decided to benchmark Ricoh’s fuel spend by consolidating the historical information to find out miles driven, fuel prices paid and the economy being achieved.

It first needed a baseline from which Ricoh could identify the key areas to target for improvement and the actions that it would need to take.

Once LeasePlan had established the fleet profile, it brought its fuel partner Shell into the project team.

Fuel spend

The two companies developed an automated system to track the important metrics of Ricoh’s fuel use, not just on a fleet-wide basis, but looking at individual drivers as well.

“We picked 40 drivers at random and put them into a 60-day pilot project with Shell and LeasePlan,” says Smart.

“The idea was to trial the reporting system and see if, through careful monitoring, we could impact on the amount of fuel our drivers were using and how much they were paying for it.

“We were able to quickly spot those drivers that were driving more miles and using more fuel than their colleagues.

"With LeasePlan, we worked with those drivers on a one-to-one basis to analyse their travel planning and help them drive much more efficient routes.” 

Smart adds: “Not only did this mean less fuel was needed in the tank, but it also helped free-up time in their day which was well received by the drivers.”

One driver highlighted by Shell’s detailed mileage reporting reduced their mileage by 65% after adopting the changes recommended, saving £589 in fuel in the first month alone.

By ensuring its drivers filled up at Shell facilities, Ricoh was also able to achieve an average price of £1.01/litre during the trial period.

That compared to an average fuel spend on its remaining cards over the period of £1.05/litre.

The savings, projected across the entire Ricoh fleet, are £77,161 a year.

Driving style

Not content with simply managing fuel costs and travel planning, Ricoh also made sure staff driving was part of the initiative.

Each driver was put through an AA eco-driving course which showed how each person could drive more economically.

The training was overlaid with regular reporting of the miles per gallon figure achieved by each driver, which created competition to drive more efficiently.

The result was a 7.34% improvement of the overall miles per gallon achieved by the sample of drivers.

Spread across the whole fleet, this improvement in economy would cut £151,503 off Ricoh’s annual fuel bill.

Fuel cards

The scope for cost savings was further enhanced through the potential of extending fuel cards to the cash taker population of Ricoh’s fleet.

Currently, they claim on average 169,843 business miles a month. The company operates a tiered reimbursement rate, which results in an average payment of 15p per mile.

Comparing this to the Shell Platts pricing structure, which equates to actual cost of fuel at 9p per litre, there is a further savings potential of £122,286 if Ricoh extend fuel cards to all employees doing business mileage.

Conclusion

“It brought together a number of facets of fleet management, made possible through the collaboration of LeasePlan, Shell, the AA and our own team,” says Smart.

“In total, the pilot has proven potential savings of £350,930 for our fleet – a huge saving, and one that can be achieved with the minimum of disruption.

“Through the 60 days of the pilot, 98% of our drivers were able to fill up at Shell sites exclusively, proving that drivers would not be inconvenienced by using only the Shell network.”

Smart adds that the project shows both how profound an impact careful management can have and the benefits of bringing together a number of suppliers in one room to work closely on a single project.

“That success has meant we’ve been able to take these ideas to other
business units to bring the benefits to the wider company,” she says.