CASE STUDY – VPS GROUP

Reducing fleet maintenance costs and risk management compliance focus of business partnership

FACT FILE

Organisation name: VPS Group

Head of fleet: Steve Mulvaney

Vehicle details: 488 light commercial vehicles; 79 company cars, 4 HGVs, 40 items of plant and machinery including trailers

Business: VPS Group secures more than 50,000 properties and employs 1,500 staff in locations across the UK and mainland Europe. The company specialise in securing, maintaining and managing vacant property across a wide range of customer and industry sectors including retail, pubs, social housing, commercial property and construction sites. Core building services cover the vacant, unoccupied and void property lifecycle from an initial risk assessment, to security, including guarding, CCTV monitoring, clearing, cleaning, maintenance and preparation. The services protect properties against unauthorised access and a variety of hazards such as arson, theft, squatting and unauthorised occupation.

Head office location: Manchester

EXECUTIVE SUMMARY

Driver influenced costs are the single largest drain on a company’s in-life fleet vehicle expenditure.
This is why the fast-expanding VPS Group is working in genuine partnership with Fleet Service GB to transform its fleet into ‘best in breed’.

Initially responsible for the maintenance management of almost 300 vehicles, FSGB now ‘touches’ more than 600 company cars, vans, HGVs, trailers and items of plant delivering a wide range of services, including work-related road safety and compliance with health and safety regulations.

VPS head of fleet Steve Mulvaney said: “Improving the safety of all our drivers and fleet is a key priority for VPS. Working with FSGB has been great as the company acts as part of our fleet team. They are really nice people and easy to do business with, responding immediately to any requests.”

Mr Mulvaney took on the role as head of fleet in late 2016 and said: “The FSGB team is hugely knowledgeable and experienced. VPS is benefiting from financial savings across its fleet as well as ensuring our compliance with best practice.”

Additionally, FSGB has been instrumental in helping VPS rewrite its driver handbook so that it is now a “quick start guide” that employees can easily read.

BACKGROUND

VPS is a leading provider of vacant property and site security solutions throughout the UK and across Europe.

Owned by PAI Partners, a major European private equity firm, VPS has, over the last few years, expanded rapidly across the UK, but also in France, Germany, Ireland and the Netherlands, while also increasing its presence in Italy and Spain.

In the UK the company’s acquisitions include Redfields Landscaping, Lotus Landscaping and Design and most recently Evander Glazing & Locks.

Headquartered in Manchester, VPS UK operates out of 23 combined service centres across the UK and Ireland. The expanded businesses’ focus on the protection of people, property and assets on a temporary or emergency basis. Core services cover the vacant, unoccupied and void property lifecycle from an initial risk assessment, to security, including guarding, CCTV monitoring, clearing, cleaning, maintenance and preparation.

FSGB launched in early 2015 and a member of its independent garage network referred the company to VPS UK.

At the time VPS UK operated a fleet of 282 light commercials and company cars with the vast majority of the vehicles being vans. Expansion of the company has taken the total number of vehicles operated to more than 600, of which almost 500 are light commercials.

Critically, following the company’s rapid expansion – and further growth is anticipated which will also mean the number of fleet vehicles increasing – a major restructuring that included the appointment of a new top management team that included David Taylor-Smith as chief executive and Colin Woodland as operations director led to integration of the businesses.
Integration also led to the appointment of Mr Mulvaney as VPS head of fleet from his previous role as network operations southern manager at Evander Glazing & Locks.

That triggered an in-depth fleet review and ultimately an expansion of the business partnership with FSGB with the delivery of a broader range of in-life fleet services.

THE FLEET MAINTENANCE CHALLENGE

All fleets are striving to reduce their cost base and VPS conducted a wide-ranging strategic review of its vehicle operations in 2014 and decided to appoint a new fleet management company after discovering that its incumbent partner was not delivering value for money and there were weaknesses in its service provision.

VPS wanted to appoint a company that was focused on client communication and working hand-in-hand to further improve best practice across the fleet.

James Freeman, head of procurement, VPS UK, but in spring 2015 head of operational support, said at the time: “We were looking to bring a more scientific approach to the management of our fleet. It was clear we had to make major changes to the way our fleet was externally managed.”
Following a series of meetings between Mr Freeman and FSGB’s head of sales Marcus Bray, VPS became the fleet management company’s first major client.

It was, acknowledges FSGB, a tremendous show of faith in a newly launched company, while VPS said it was aware of how the business came into being and the history of its management team in the industry.

But the partnership has gone from strength-to-strength and that is underlined by VPS asking FSGB to take on more responsibility and a greater number of vehicles as the company has expanded.

VPS has a track record of outright purchasing all vehicles, which are typically utilised over a five-year/150,000-mile operating cycle, although replacement is influenced by mileage and service, maintenance and repair costs. In-life management services provided by FSGB were initially: vehicle maintenance and rental management and management services related to vehicle taxation and the payment of fines.

Rapid acquisition increased the fleet size, with the major growth coming with the 2016 purchase of Evander Glazing & Locks, which added a further 234 vehicles all on contract hire.

The appointment of Mr Mulvaney and the fleet review led to FSGB supplying additional services that included accident management across the newly expanded fleet and VPS introducing FSGB’s newly launched Achieve Driver Management programme.

Mr Mulvaney said: “VPS had expanded as a business, but we only started integrating the UK acquired businesses in mid-2016. It was clear to me that FSGB’s knowledge and experience would be vital in transforming the fleet operation.”

What’s more, as contract hire vehicles on the Evander fleet reach the end of their operational life, they will be replaced with vans bought outright by VPS with FSGB taking on the maintenance management responsibility. VPS’s early 2017 replacement programme included the introduction of 78 new vehicles comprising 42 specialist tippers, 35 panel vans and a motorcycle with a similar number of new models being introduced later in the year that will include 55 panel vans and 23 tippers.

Additionally, VPH has a further 300 vehicles operating outside of the UK that eventually will come under Mr Mulvaney’s remit.

CUTTING MAINTENANCE MANAGEMENT COSTS

AlThe cost of most products and services increase year-on-year but, remarkably, the pence per mile vehicle operating costs on the VPS fleet have reduced since FSGB took over management responsibility.
All VPS vehicles have service, maintenance and repair work undertaken through FSGB’s nationwide independent garage network.

When FSGB took over maintenance management of the fleet the pence per mile operating costs on a sample of 176 vans were 5.12p per vehicle. That figure has now reduced to 5p per vehicle per mile across a sample of 196 vans – a 2.3% cost reduction per vehicle per mile despite a 16% fleet size increase.

What’s more, FSGB’s data analysis highlights that the average age of vans in the sample has reduced by four months to 39 months (down 9.3%), while average annual mileage has increased 3,669 miles to 23,971 (up 18%) with average total mileage up 2,927 miles to 73,264 miles (up 4%).

What the figures reveal is that despite the fleet working harder with average mileage rising, average fleet costs per vehicle are continuing to reduce.
Mr Mulvaney said: “It was clear to me that previously VPS did not have a real grip on fleet costs. FSGB was providing data, but it was not being used.”
VPS now employs a data analyst within the company’s fleet department to study the information provided by FSGB.

Mr Mulvaney said: “The data we are provided with is extremely robust and it is highly probable that the cost savings are even higher because at the time FSGB took over maintenance management of the fleet costs were not being recorded as accurately as they are now.”

Marcus Bray said: “There is no doubt that the current VPS management working closely with FSGB is continuing to drive out costs. As FSGB builds up its database on each vehicle, we are confident that significant further costs savings will accrue on a per vehicle basis.”

Building up a vehicle operating lifecycle report on every vehicle and the service, maintenance and repair spend associated with the van or car, while also closely managing vehicle mileage, enables FSGB to calculate the pence per mile data.

Mr Mulvaney said: “FSGB is responsible for the day-to-day management of the fleet and all remedial vehicle work is carried out through its own appointed garage network. With service centres nationwide it is important that we have reliable garages that are close to our vehicle locations.”

He continued: “Safety is paramount along with compliance with manufacturers’ service schedules. I like the idea that FSGB’s garage network is fully audited and that gives me confidence that all maintenance work is carried out in accordance with best practice.

“We have depots nationally and I am receiving very positive feedback from the managers that vehicles are being well maintained and customer service is first class.

“The excellent service is one of the many reasons why we have expanded our business partnership with FSGB as our fleet has grown. FSGB has delivered enhanced service, fleet efficiency and sustainable cost reduction and control.

“FSGB is going the extra mile in managing the VPS fleet and delivering an excellent service. FSGB maybe a new company, but the management team has a long-established pedigree in the industry.”

Mr Mulvaney added: “We are totally satisfied that FSGB is spending our money as though it was their money and is constantly monitoring every penny to ensure we receive value for money.

“FSGB has maintenance control over significantly more than 50% of the VPS fleet and that figure will increase as VPS move from contract hiring vehicles to outright purchase.

I am confident that the data I am being provided with is accurate so I can talk to drivers and their managers from an informed position.”

ACHIEVE – MANAGING DRIVERS, VEHICLES AND JOURNEYS EFFECTIVELY

Achieve Driver Management is FSGB’s industry-leading and unique ‘driver centric’ differentiator which provides clients with the necessary tools to assist all their drivers to take ownership and responsibility for work-related road safety compliance.

The Achieve programme is continually evolving, but at its heart is a driver compliance programme that ensure companies manage their work-related road safety responsibilities in accordance with best practice and legislation.
The Achieve ‘toolbox’ already includes a driver app with a wealth of sophisticated cutting-edge features delivering 24/7 support to employees at the wheel of company vehicles. Features include:

  • Interactive notifications, prompts, reminders and alerts
  • The ability to arrange bookings for servicing, maintenance and repairs, including tyres
  • A facility to report an incident, crash 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 configurable check sheet for vehicle condition reporting
  • The ability to view vehicle lifetime history.

Mr Mulvaney said: “The driver app benefits VPS by allowing us to carry out full vehicle inspections both scheduled and ad hoc at the touch of a button. This information is seamlessly uploaded into the customer portal for immediate review. We now have a better view of the condition of our fleet at our fingertips. Additionally, drivers can now book service, tyres and glass requests direct on the app. It is excellent technology, seamlessly delivered.”
Additionally, Achieve:

  • Embraces driver licence validation
  • Measures driver performance with data fed into the online system from a variety of data gathering sources including telematics.

FSGB’s expertise identifies that the single biggest influence on fleet operating costs is the driver and improving their performance is the key to keeping costs under control.

The Achieve programme has been developed to continually measure driver performance and behaviour, while also ensuring compliance, and by acting on the data and management reports provided, vehicle-related costs will reduce.

The Achieve programme fully supports VPS’s work-related road safety objectives, for 100% driver and vehicle compliance.

Every driver is tasked to undertake a weekly check on their vehicle using the app. This important initiative is supported by monthly checks of all vehicles by service centre and depot managers.

Mr Mulvaney said: “VPS is now able to manage its driver influenced costs through Achieve. We are receiving some excellent information on all aspects of the fleet. We are taking the raw data and using it in management reports that are sent to the board weekly and monthly.”

Furthermore, VPS vehicles are equipped with telemetry – four systems are currently used due to the company’s acquisition but that figure will be reduced to a single supplier over time – and the information will be married to the Achieve data to further improve driver, vehicle and journey performance monitoring.

What’s more, VPS is using the data relating to cost-influencing factors such as fuel use, tyre wear, the replacement of friction parts and in numerous other areas as the basis for a driver reward scheme.

VPS operates through six business units and drivers in each will every month have the opportunity to win a prize based on their performance and their vehicle’s maintenance record. The monthly winners will then go on to contest an annual prize.

Mr Mulvaney said: “Driver education and participation is critical to both safety and cost management. We can use the data FSGB is generating to show drivers how they can improve and, potentially, introduce new initiatives and targeted interventions where an issue is highlighted.”

Not only that, but there are pockets in the VPS business where vehicle mileage is inconsistent with age. For example, some vans at three-years-old have clocked up 150,000 miles, while others at five-years-old have travelled just 60,000 miles.

Mr Mulvaney said: “The data will enable VPS to reallocate vehicles so age and mileage on a per vehicle basis is more consistent. That, in turn, will also help to reduce fleet maintenance costs.”

GEOFFREY BRAY EXECUTIVE CHAIRMAN, FLEET SERVICE GB

“In my experience companies that genuinely embrace a partnership philosophy will always succeed if they set out achievable objectives and then agree a delivery plan.

“VPS management clearly recognised during the early discussions that whilst Fleet Service GB was a new start business, the collective knowledge and experience of the management team would play an important role in helping it formulate and implement an operationally efficient and cost effective fleet policy.

“Both teams are to be congratulated on the open and transparent approach adopted since the beginning of the partnership.  Daily, weekly and monthly analysis, and most importantly enhancements of the operating systems and procedures, ensure that challenges or issues as and when identified are dealt with immediately.

“Understanding the VPS needs and then becoming a genuine extension of the company’s management team is an embedded trait of Fleet Service GB. The results to date, in particular the implementation of Achieve, the driver management programme, within a very short time frame, demonstrates from both sides a professional commitment to deliver the objective.

“I have every confidence that the operating formula applied to the management of the vehicle fleet by VPS and Fleet Service GB will continue to strengthen and deliver significant mutual benefits.”

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