Case Study – Stannah

Fact File

Organisation name: Stannah

Group information systems director: Martin Carter

Vehicle details: 410 light commercial vehicles; 290 company cars.

Business: Stannah is a British family-run global business with a turnover in excess of £210 million, employing 1,700 people working in the UK plus subsidiaries. Fifth-generation members of the Stannah family now manage the company, which celebrates its 150th anniversary in 2017. Stannah is the UK’s leading independent supplier of lift products supplying goods as diverse as loading systems, service lifts, platform lifts, homelifts and stairlifts.

Head office location: Andover.

Executive Summary

Robust management of fleet maintenance costs across the van fleet operated by Stannah has delivered a saving of more than £100,000 despite a 32% increase in the number of vehicles operated.

Stannah, the UK’s leading independent supplier of lift products outsources the maintenance management of its now 410-strong van fleet to Fleet Service Great Britain (FSGB).

The headline figures, which include a pence per mile saving per van of 1.73p reflecting a reduction of 38% over a near seven-year period, deliver a clear view that focused maintenance management can deliver significant operational financial savings on, what is generally perceived to be, a major area of fleet expenditure.

Total service, maintenance and repair (SMR) costs in December 2010 across Stannah’s then 310-strong van fleet totalled £341,620.

In June 2017, despite the fleet increasing to 410 vans and total fleet mileage rising10% or 787,120 miles the total cost reduced to £232,470.

Martin Carter, Stannah’s group information systems director, said: “Stannah is very open with FSGB about what we are trying to achieve. We want to collect data so we can exactly identify what our costs are and effectively and efficiently manage the fleet.

“We also want a partner who understands what we are aiming to do and then get on and do it for us. That is exactly what FSGB does. It understands the culture of the Stannah business, makes the right decisions on our behalf and is very good at doing so.”

FSGB head of sales Marcus Bray said: “The maintenance management results are very positive which demonstrates, in my view, a good working partnership and also, very importantly, a Stannah policy which encourages ownership and responsibility from a driver perspective.”

Background

FSGB was launched in spring 2015 led by Mr Marcus Bray, who with a number of industry-experienced colleagues decided to form a unique co-ownership fleet management company.

When FSGB launched, Mr Carter, who is in charge of the fleet, decided to invest his trust in the new company’s ability to deliver. That led to FSGB taking on the maintenance management of the Stannah van fleet that has already increased during the period by more than 50 units and currently numbers some 410 vehicles.

He said: “Fleet Support Group (the former provider) had been acquired and under the new ownership there was a significant transition period and a lot of upheaval.  We wanted to spread our risk and the personnel at FSGB were a tried and trusted group of people and much focused on customer service and building partnerships.”

The vast majority of Stannah’s all-diesel van fleet are Mercedes-Benz Vito and Sprinter and Volkswagen Caddy and Transport models operated over a five-year/120,000-mile replacement cycle with maintenance undertaken on a pay-as-you-go basis.

The fleet maintenance challenge

Vehicle SMR accounts for a high percentage of fleet operating costs so FSGB provides a bespoke solution that guarantees maintenance standards, controls costs and streamlines administration and all with a totally personal service.

Everybody knows that well-maintained vehicles improve a fleet’s efficiency and effectiveness. The big question is: what’s the best way to achieve it? The options are to manage in-house or outsource to an expert organisation such as FSGB.

Stannah chose FSGB because, while the organisation may only have been launched in 2015, its co-ownership founders and employees have many years of proven expertise delivering vehicle maintenance management and reducing costs.

There is no ‘one size fits all’ solution to managing vehicle maintenance. Nevertheless, the FSGB approach is to understand clients’ operational and other vehicle-related demands and then customise a service maintenance programme that satisfies those requirements and delivers a solution.

Underpinning FSGB’s fleet maintenance management solution is:

  • A 24/7 service support centre manned by the company’s own qualified staff. Fleet Service GB never closes – this aspect of the service is a key differentiator.
  • Its own approved national network of independent garages providing a highly professional and flexible service.
  • A National Price Promise that offers fixed prices for the same job on the same vehicle throughout the UK for around 75% of all predicted service and maintenance requirements. Prices are guaranteed for at least a year.
  • Instant online access to all reporting and fleet performance evaluation through an
    industry-leading portal.
  • Market-leading IT systems customised to process all transactions in line with an individual company’s fleet policy.
  • A team of qualified maintenance controllers that undertake pre- and post-event control to maximise value for money.

Additionally, FSGB provides customers with access to a driver app that offers a wealth of sophisticated cutting-edge features delivering 24/7 support to employees at the wheel of company vehicles.

Stannah drivers use the app’s features that include:

  • Interactive notifications, prompts, reminders and alerts
  • The ability to arrange bookings for SMR, including tyres
  • A facility to report an incident or breakdown, using GPS-enabled location services, which directly link to the FSGB Support Team
  • A facility to upload images, capturing incident and/or vehicle condition
  • The ability to update vehicle mileage in real-time
  • Multiple vehicle management options
  • A bespoke check sheet for vehicle condition reporting
  • The ability to view vehicle lifetime history.

Stannah was involved in the development and piloting of the app and Mr Carter said: “It not only delivers a high level of convenience for our drivers but is also reassuring for compliance.”

Cutting maintenance management costs

Key performance measures indicate that the pence per mile vehicle operating costs on the Stannah van fleet have reduced a staggering 38% between December 2010 and June 2017.

Comparing data over a snapshot 18-months between July 2009 and December 2010 when Fleet Support Group was managing maintenance costs and the 16 months ending June 2017 when FSGB had taken over reveals:

  • A fleet expanding from 310 van to 410 vehicles an increase of 100 units (32%)
  • The age of the fleet reducing by eight months from
    42 to 34 months
  • The average mileage age of the fleet reducing
    24% from 77,189 miles to 58,932 miles
  • The average mileage travelled per van per year reducing 17% from 24,427 miles to 20,389 miles
  • Pence per mile cost per vehicle reducing
    38% or 1.73p from 4.51p to 2.78p
  • The cost per van per year reducing 49% from
    £1,102 to £567.
  • Breakdown and recovery is excluded from FSGB’s total maintenance cost formula. However, if it was included, the difference would be just 2-3% of additional cost.

What’s more a detailed month-by-month analysis of the figures since FSGB took over maintenance management of the van fleet reveals that as vehicles have clocked up more miles – averaging 15,854 miles per van in March 2016 rising to 20,389 in June 2017 – so the key pence per mile cost has reduced over the same period from 3.04p per van to 2.78p per van.

Notwithstanding an overall reduction in the average miles travelled per year per van from 26,315 in July 2009, which would positively influence costs as the pence per mile figure then was 4.47p, the savings are significant.

Mr Carter said: “The cost of most products and services increase year-on-year but, remarkably, the pence per mile vehicle operating costs on the Stannah van fleet have reduced since FSGB took over management responsibility.

“Pence per mile is widely recognised as the most accurate measure of a vehicles maintenance expenditure. The three key measures are: total sum spent, total miles travelled and achieved pence per mile. The fact that over the periods measured – the 18 months ending December 2010 and the 16 months ending June 2017 – that pence per mile costs have reduced 38% is very significant.”

In part, it has to be acknowledged, that is due to improved vehicle manufacturer reliability, but it is also a reflection on the overall management approach to identify and then manage maintenance costs. As a result, over the measured period the cost per vehicle per annum reduced by £532 or 49%.

Yet comparing the mileage travelled by the van fleet in December 2010 to June 2017 – 7.57 million miles versus 8.36 million miles – and Stannah has saved a colossal £109,150 or 32% despite a significant increase in the size of the fleet.

During the last two years the age profile of the van fleet has reduced, while overall mileage has increased average mileage per van has decreased.

Mr Carter said: “We are adhering much closer to our five-year/120,000-mile policy. We used to let some vans run on, but using FSGB’s data we looked at the pence per mile operating costs over a period of time and it was obvious that above 120,000 miles there was a clear increase in SMR expenditure.”

Fleet decision-makers invariably work in their own silo and, while Mr Carter believed the pence per mile figures were good he had little idea as to how they compared with similar fleets.

He said: “We asked providers, including FSGB what the benchmark pence per mile figures were and they showed that we are out-performing the van sector. Benchmarking is key, although it is only a reference point.”

Driver discipline helps deliver SMR cost savings

Stamping out driver abuse of vehicles is critical to effectively managing SMR
costs and Stannah uses a suite of fleet management tools to ensure vans are in tip-top condition.

Each van is allocated to an individual driver who works from home with Mr Carter explaining: “That means every vehicle is completely traceable and it makes a major difference compared with an employee who travels to work each day and collects a van from a depot before returning it at the end of their shift. At Stannah each driver effectively ‘owns’ their van.”

Efficient fleet and driver management at Stannah starts with buying the ‘right van’ for the job required. Each vehicle is then equipped with telematics that records and delivers to Mr Carter a raft of data notably relating to driver behaviour and how a vehicle is driven. Additionally, any incident is reviewed in detail with, potentially, driver training the result.

Furthermore, with drivers logged on to the FSGB app it brings a significant element of self-management to the van fleet.

Mr Carter said: “Many company’s employees’ drive around in vehicles and their employer has no idea what their behind-the-wheel performance is. We ask our drivers to provide information and we give them data and they react. It makes our job easier and is having the desired effect. The result is that the majority of our drivers do not have crashes and drive sympathetically, which all helps to deliver maintenance cost savings.

“The fleet management tools that we use generate cost reductions through savings in SMR and fuel and a reduced number of crashes.”

The raft of data generated from in-vehicle telemetry allied to the information collected by FSGB means, as far as Mr Carter is concerned, that it makes totally logical sense for management of the fleet to reside with him, an IT professional.

He said: “I spend about one day a week on fleet-related work, but there is complete synergy with the rest of my job: Fleet management is becoming increasingly digitalised and vehicles are becoming increasingly connected.”

The Future

Continuing to “hook up” data from all sources is the key for Mr Carter to effectively and efficiently manage the Stannah fleet and ensure that “we remain focused and do not deviate from our aim”.

That mission remains to continue to reduce fleet costs as much as possible and while it is difficult to see currently where further maintenance costs savings may accrue, he said: “We must keep watch.”

There is also increased focus on whether the van fleet should remain an all-diesel operation amid the ever-present media headlines and political focus around the requirement to cut emissions and simultaneously improve air quality.

Mr Carter said: “Diesel is the right power for the Stannah fleet presently. But that will change at some time and as a business we don’t want to be caught out with a five-year operating cycle.”

However, despite the length of replacement cycle, being an outright purchase fleet gives the company flexibility and the ability to react swiftly to marketplace developments unlike potentially leased fleets that are likely to be subject to termination penalties if defleeting prior to end-of-contract.

Geoffrey Bray Executive Chairman, Fleet Service GB

“Positive partnerships between suppliers and customers are critical if business success from the perspective of both parties is to be achieved.

“In the case of vehicle SMR management technology, communication, vehicle reliability and control of every aspect of maintenance-related expenditure, all play their part. However, above all trust must underpin a successful partnership.

“Stannah has a much switched on fleet management team led by Martin Carter, who is extremely hands on and keen to ‘make things better’. That means Fleet Service GB is continually challenged to deliver above and beyond with complacency not an option.

“Fleet Service GB provides Stannah with a comprehensive fleet maintenance management solution and, importantly, ownership of every single service and repair issue is fully managed through to completion.

“Fleet Service GB operates as an extension of Stannah’s own fleet department. The partnership is like a well-oiled machine and, based on trust and a willingness to challenge, results are achieved.”  The future is very exciting and at the same time challenging.

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