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Fixed maintenance brings budgeting certainty for NHSBT

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NHS Blood and Transplant (NHSBT) outsources maintenance for its 500 commercial vehicles to fleet management provider Fraikin at a fixed cost.

Pay-as-you-go maintenance was not appropriate as NHSBT requires budgeting certainty.

Contract hire with maintenance was not an option either as the vehicles are leased from a number of providers through the Government Procurement Services (GPS) framework and NHSBT wanted to work with one maintenance provider.

“We wanted one maintenance provider who would take ownership of our fleet so that when one of our vehicles is in the workshop for any reason then urgency is applied,” explains Larry Bannon (pictured), national fleet service manager at NHSBT.

“We’re essentially an emergency service and we need to make sure our vehicles are available all the time. If we had four or five different suppliers on contract hire we would have to deal with four or five maintenance controllers and the urgency might not be applied.”

NHSBT overcomes the main disadvantage of fixed cost maintenance – potentially budgeting for more maintenance than is actually carried out – by having a profit-share arrangement with Fraikin.

“At the end of the financial year we have a review and see whether Fraikin has over recovered against the fixed cost or under recovered,” says Bannon. “If it is over we will share it 50/50. If it is under Fraikin bears the cost.

“It incentivises Fraikin to negotiate keener prices with its suppliers.”

The commercial vehicle fleet costs less to maintain now than it did nine years ago with an average cost of just under £4 per vehicle per day compared to around £6 in 2004 when NHSBT began monitoring average costs.

Replacing vehicles more regularly has helped to lower costs. There was a spike in the average maintenance cost in 2011 due to one department delaying vehicle replacement.

Although NHSBT pays a fixed cost for each vehicle the cost increases each year as the vehicle ages.

“It’s an incentive for us to keep our age profile low on average so we get cheaper maintenance,” says Bannon.  

He has also tweaked NHSBT’s requirements each time the contract is tendered, helping to trim costs.

Altering vehicle type has further reduced costs. A number of crew cabs have been replaced with minibuses, which are 60% cheaper for maintenance.

Independent garages are used with stringent KPIs set on vehicle availability, MOT pass rates, first time fixed rates and planned maintenance slippage.

“If the vehicle is supposed to go in on a Thursday it should go in on that day, not slip a week or two,” says Bannon. “It helps our operations team plan hire vehicles.”

Preventative maintenance inspections are key.

Bannon points out that there is no standard checklist for specialist vehicles as additional equipment such as bluelights and fridges have to be checked.

He monitors how reliable the inspection regime is to see if certain items need to be checked more frequently and to ensure the right things are being checked.

“We try to minimise the number of thing that can wear out or go wrong,” he says. “A preventative approach is always cheaper.”

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