Challenging the status quo is a natural requirement for all fleet managers. This is because vehicle operations must not remain static within an evolving business environment, amid the impact of legislative, tax and compliance changes.
That’s the message of Keith Abell, fleet manager at privately-owned Integral UK, which operates a fast-growing fleet likely to reach 2,000 company cars and vans as a consequence of anticipated contract wins in 2015.
Critically, Abell, currently in charge of a fleet of more than 1,750 vehicles – 1,020 vans and 737 cars – of which more than 75% are work essential, says: “Integral is totally reliant on the fleet to undertake work. Therefore the fleet operation is required to be relevant to business needs. Fleet managers must understand the business they work for – and what is important to the organisation. That must then be conveyed to stakeholders, drivers and suppliers.”
Vehicle downtime management is essential to Integral, the largest independently-owned mechanical, electrical and fabric property maintenance business in the UK, providing both planned preventative and reactive maintenance to more than 1,600 commercial and public sector clients in 40,000 locations from 15 offices.
“We have an engineer in every postcode, which means we need fleet support in every postcode,” says Abell, who has 20 years’ fleet experience. “If a customer has not got any water or has an electrical problem on their site, they require one of our engineers immediately. Having no vehicle available is not an option.”
Bristol-based Integral has seen recent growth from acquisitions and contract wins. That expansion was one of the reasons behind the 2012 signing of a three-year sole supply deal with GE Capital. It provides vehicles on contract hire and a wide range of fleet management services: accident management, breakdown and roadside assistance, vehicle maintenance management, daily rental replacement vehicles, driver support and risk management.
The funding and outsourcing arrangement has been the chosen route for Integral for many years, but it has switched providers twice in the last decade. Abell, who oversaw the move to GE having joined the business in June 2010, explains: “The increasing demands of the business and the resulting growth of the fleet as well as its complexity required a greater depth of support and consistency than available from the incumbent supplier. In addition to financial benchmarking, the important criteria for the appointment process was a good cultural fit with Integral.”
As well as scale, capacity and leverage to react quickly to the increasing demands of a growing business, Integral wanted to be certain that customer service levels matched those the company was committed to providing to its own clients.
“Transparency, an open, honest relationship and full understanding were key considerations,” says Abell, who joined Integral having been made redundant from his previous employer of 31 years, including 15 years in fleet. “Eliminating the unknowns, the hidden costs and ensuring the key cost elements were not reliant on prospective end of contract considerations – both reward and penalty,” he adds.
Monthly operational and quarterly strategic meetings are held, along with an annual review, while daily contact occurs with key stakeholders. “We challenge the GE team and extended third party supply relationships to consistently deliver both on service and price – each element is reviewed independently and appropriate developments and decisions taken,” Abell explains.
Total cost of ownership data is essential to Integral UK with downtime management to the fore with GE. A set of critical service level agreement expectations are in place to monitor mechanical and accident service, maintenance and repairs (SMR). Daily messages are received by Integral in respect of vehicles that are outside of expected downtime parameters.
“I need to know the reasons for downtime so that we can spot any trends and take action perhaps in terms of future procurement,” says Abell.
Franchised dealerships are predominantly, though not exclusively, used for SMR work with ‘while you wait’ servicing an option. GE is tasked with using the “most appropriate outlet for the work”, balanced against the cost of hiring a vehicle to keep an engineer mobile.
Abell explains: “Repair and servicing suppliers are used on the basis of providing the most efficient arrangement at a competitive price. We continue to review the market for opportunities to reduce costs and increase efficiencies in relation to vehicle downtime. This process starts by reviewing vehicle manufacturer product reliability, service coverage via dealerships and any manufacturer aftersales support available.”
They were among the reasons behind Integral’s decision two years ago to switch its engineering fleet – now consisting of more than 1,000 vans and almost 350 cars – to a solus all-diesel Vauxhall deal. The fleet is composed of Combo, Vivaro short wheel base and Astra Estate 1.6 Design models.
Additionally, the management fleet of 329 cars is composed of models from a choice of seven manufacturers and includes 27 hybrid models, which are growing in number, after a “slow burn”.
Plug-in vehicles have been trialled, but performance is impacted when used in their fully laden capacity so are currently deemed unsuitable for the Integral fleet. Nevertheless, carbon reduction is a key issue for the company and it carries out an annual review of fleet operations with the Energy Saving Trust.
Abell is currently engaged with the Trust on the 2015 review, which includes compliance with the newly introduced Department of Energy & Climate Change’s Energy Savings Opportunity Scheme (ESOS). The first audit must be completed and submitted by December 5.
“It’s an audit that we welcome as we continue to strive to achieve fleet efficiencies within the operational constraints of the business,” he says.
Average emissions across the car fleet are currently 118g/km of CO2 – a long way below Integral’s CO2 cap of 140g/km. “Emission reduction across the car fleet is self-fulfilling, as manufacturers continue to introduce lower CO2 vehicles and drivers look to cut their benefit-in-kind tax bills,” says Abell, who plans to reduce the cap level in 2015.
Mpg is a key element of commercial vehicle selection and, to help manage fuel bills, Integral has introduced a “price aware” policy to ensure drivers fill-up at low cost outlets.
Meanwhile, telematics across the entire engineer fleet of cars and vans are being upgraded from ‘track and trace’ systems to include a range of tools that monitor driver behaviour with a focus on both further cutting fuel use alongside reducing accident levels.
Incidents are limited to typically low speed events, but with Integral insuring third party only, it foots the bill for its own costs. In 2014 accident costs averaged almost £1,000 per incident with a 49% accident rate less costs recovered from third parties.
Integral’s insurer highlights that incident rate and costs are better than many of the company’s peers with a similar fleet profile, but Abell says: “We are using telematics to not only help manage vehicles, but manage the influencer of costs and that’s drivers.”
Toolbox of standards
Regular vehicle inspections of liveried cars and vans to convey a professional company image and frequent safety-focused ‘toolbox talks’ are part of Integral’s road risk strategy, while a driver league table is used as the core mechanism for identifying both individual and fleet incident trends, with appropriate interventions triggered.
The league table takes account of a number of influential factors deemed to be contributory to an employee’s risk rating, including speeding fines and vehicle condition reports as well as incident levels.
Integral has become a recent member of the Freight Transport Association-managed Van Excellence scheme.
Abell says: “We look to visibly demonstrate to our employees, customers, our potential customers and the wider public population that we are a responsible company that works to a high standard of operational ethics. We view this accreditation as an independent credible mechanism to demonstrate that our fleet operation supports the Integral business to deliver service excellence.”
Future challenges are many and varied, with Integral employing nearly 2,000 technicians and engineers and operating one of the largest national mobile maintenance fleets in the UK, enabling the focus to be on ‘first time fix’ and a quick and efficient response.
Reporting to finance director and part-owner Paul Salmons means, says Abell, quick decisions can be made on fleet strategy.
“Integral is extremely reactive to the needs of customers, and a key part of that is having a responsive, flexible fleet and supporting structure in place which has the depth and competency to react quickly,” he explains. “My challenge – and opportunity – has been to build strong external relationships to supplement internal capabilities.”
This year, Abell’s key aim is to maintain the fleet profile, with cost, environmental and operational efficiency objectives underpinning his role, which he says should be true of all fleet managers: “Fleet does not remain static, so fleet managers must always challenge the way operations are undertaken.”