Archant has saved an estimated 15-20% on its maintenance costs by switching from contract hire with maintenance to pay-as-you-go.
The decision was part of a move to outsource the management of its fleet of 530 vehicles to CLM four years ago.
“The advantage with pay-as-you-go is that you are not paying a risk premium,” explains Greg Parton, group head of procurement and sustainability at Archant. “If you opt for contract hire with maintenance the provider works out a budget and adds a de-risk percentage.”
Parton suggests that the management fee per car per month that Archant pays CLM is no more expensive than leasing a fully-maintained car.
Savings also come from using CLM’s nationwide network of independent garages.
“It has got the relationships,” he says. “We’ve not attempted to do maintenance ourselves because there could be a big overhead.”
Parton’s role is to “manage the contract” and “make sure CLM is doing what it says it will do”.
He has access to a live online portal for management information, as well as having monthly contract reviews and an annual strategic review with CLM.
CLM provides a breakdown response telephone line which has to be answered within three rings.
Invoices have to be “right first time” and received by a certain date.
Service level agreements have also been set for vehicle off-the-road time and the provision of a replacement vehicle.
Parton points out that “what works for Archant won’t work for everybody”.
“If you have a handful of vehicles and one proves to be expensive to maintain, pay-as-you-go might not work,” he says.
“We have a very large number of the same vehicles on the road which de-risks the approach.”