Maximising operational efficiency

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Royal Mail (RM) operates 33,000-plus vehicles and is increasing efficiency and reducing costs of its fleet management operation following the implementation of what is claimed to be the ‘most advanced fleet management solution in Europe’.

The Chesterfield-based Vehicle Services operation of RM invested in the Maximus FleetFocus M4 fleet management system in May 2003. Deployment was completed in November 2003 and, in less than 12 months, has not only streamlined costs, but increased operational efficiency across its vehicle fleet and throughout its network of 150-plus workshops.

Paul Gatti, head of commercial fleet for RM’s Vehicles Services, enthuses about the Maximus FleetFocus M4 fleet management system which is at the hub of the RM solution. “It was a major decision for us to invest in this new system but we are delighted by the results not only from the perspective of improvements in operational efficiency but also financially. Our overall solution comprises of a data warehouse for our fleet data with a powerful reporting and data analysis tool in Business Objects all built around the exceptional data capture and control facilities of the FleetFocus M4 system.”

Maximus is a US-based company specialising in asset management solutions. The Assets Solutions Division, of which the UK operation is part, specialises in Fleet Management systems. The Division employs has 600-plus customers covering more than seven million fleet assets.

The relationship between RM and Maximus goes back 14 years, but it was only at the start of 2002 that the large American Corporation set up a UK operation to replace its UK distributor who, until then, acted as a local agent for their products in the British market.

When the relationship between the two organisations was originally born in 1990, the RM requirement was for a Workshop Management system and, after a long selection process, the Maximus GEMS2000 system was chosen and implemented.

Maximus UK managing director Martin Greaves was involved with the company’s UK distributor at the time and has subsequently seen how the Royal Mail’s needs have developed, culminating in its decision to implement the Maximus FleetFocus M4 Fleet management system in 2003.

He says: “Royal Mail has been undergoing a major review as it faces competition in the postal market with a drive to improve efficiency and performance. A requirement existed to bring in an advanced fleet management system to help the business meet those challenges. The fleet operation and indeed the fleet register were very fragmented and operating on various systems in various locations. The task was to bring everything together under one all encompassing fleet management system. After reviewing their options in the Fleet marketplace, the decision was taken by Royal Mail to move forward and to implement the Maximus FleetFocus M4 system. Full implementation started in May 2003 and was completed in November 2003. What was one of the biggest and most demanding implementations that Maximus had ever undertaken was completed on time and within budget.”

Greaves continues: “The big advantage now to the Royal Mail is that M4 is the only fleet management system in the whole organisation which is a major step change. Whether a Royal Mail vehicle is based in London, Edinburgh, Cardiff or Belfast, or indeed anywhere in the UK, it can easily look at the vehicle’s full life history and its operational performance whether it is a small van, a trunking vehicle or a Parcelforce Worldwide vehicle. The data is all part of a single fleet database where the whole operation can be analysed, trends recognised and action taken. Royal Mail can now use this data to be pro-active in supporting their business needs and operational efficiencies.”

Providing functionality

Today, the objective is to achieve optimum use of the vehicle fleets, whilst complying with safety and legalities. This is starting to be addressed at RM through FleetFocus M4 which is now at the ‘hub’ of the whole of the company’s fleet operation. Any system requirement in RM involving the many aspects of fleet data is now captured and encompassed by M4.

The M4 system at RM now provides functionality covering areas such as full asset life-cycle, vehicle maintenance and full job costing & control, workshop management, fuel, O-licence control, storeroom control, vehicle availability and downtime controls, warranty flagging and recovery and customer billing. In fact anything that ever happens to the vehicle or in a workshop!

“Royal Mail is now using this data to create improvements and the organisation is more in control of their fleet than they ever have been, both from an efficiency and safety point of view,” says Greaves.

A big issue for the RM fleet in recent years has been the control of vehicle availability. The role of RM’s vehicle services team is to provide the vehicles to handle the mail. The Maximus FleetFocus M4 system has enabled the vehicle operation to be aware of what vehicles are available, when and where they are needed and what the impact of taking a vehicle out of service may be.

Royal Mail can now plan when vehicles are in for service and repair at the most efficient times and also forecast to have vehicles available to replace delivery vehicles in the workshop as necessary. Greaves explains: “Availability of the fleet has been a big driver in creating new efficiencies for Royal Mail through M4 and is a big contributor towards payback against Royal Mail’s investment in the M4 Fleet solution.”

Gatti comments: “We initially had a system called VWMS [Vehicle Workshop Management System] which was originally based on GEMS2000. This was deployed in all our 150-plus workshops, but due to the ageing technologies and our infrastructure limitations this was slow and unreliable. At the time we had nine divisions in Royal Mail and one system for each division, plus Parcelforce Worldwide on a totally different system. It was very fragmented and it meant that it was difficult to compare data quickly or get a clear vision.

“So we had lots of legacy systems, in total over 20 different systems of which the majority held their own version of the fleet register. There were also scores of in-house MS-based systems for many different aspects of fleet control. At the time we had a fleet of 40,000 although it was hard to give an accurate figure!”

Improving efficiency

Gatti says the aim at RM was always to have a single fleet management system and it looked at several systems. The overall RM group strategy was towards large ERP systems, but it felt that an Asset Management module in such systems was not the best way to properly manage the fleet. “We needed a Fleet Management system.”

He agrees that is was a ‘quantum leap’ in terms of potential efficiency improvements for the fleet arm of the business. “Fleet Management is obviously not core to the Royal Mail business but due to the size of the fleet it is vitally important that it is both cost-effective as well as operationally efficient.”

M4 has taken RM much further forward than many other systems in the company. It created a business case for investment in the Maximus FleetFocus M4 system but it knows it made the right decision and is now reaping the benefits.

Gatti says: “We are one year on in going ‘live’ with the system and it has demonstrated significant operational and financial benefits for the business.”

Having reviewed the various fleet system offerings available, Gatti opted for Maximus’ M4 fleet management system because of its extensive functionality, and he was confident that Maximus could deliver because of its track record with Royal Mail.

Gatti also reveals that a further upgrade to Maximus’ web-based M5 system is in the pipeline, although not for a year or two until good business reasons exist. “It is part of our future roadmap as we look to utilise the Internet and integrate other web applications to provide our business further benefit. M5 being web-based would be a great solution for us, as it would be so easily deployed, we would not need to touch our existing PCs.

“We could also go with the M5 functionality tomorrow quite comfortably as this is very similar to M4, and the majority of our staff are competent using the Internet. However, it is great to have a future direction already available for our Fleet Systems.”

Greaves says that one interim measure could be to use some M5 system modules to link back into M4 at RM – web pages could be made available to all RM M depots, or any other location that can access the Internet, capturing new data on M5 web screens which would feed back into the M4 database. “This means that additional functionality could be provided today with tomorrow in mind. Other customers have upgraded using this stepped approach.”

Gatti says that the business case for M4 was not based simply on the payback potential. “The business case was based upon business continuity. Our technical infrastructure was aged. If Royal Mail had not replaced some systems we could have had a problem. We may not have been able to properly manage our O-licence, nor manage the fleet asset base, etc, because there may not have been a system to do it on.

“The M4 solution gave us the basis to quickly streamline our operation and review our costs. We needed a core system to properly manage the fleet and Maximus provided the solutions to our problems delivered within our demanding timescales. We have changed the way we work in Vehicle Services in order to optimise the availability of the fleet. Before M4 we could not do that. The Availability module in M4 has taken us forward in allowing us to help our customers improve the utilisation of their fleet.”

Best practice

Royal Mail executives responsible for the vehicle fleet have been to several Maximus User Conferences in the United States where they have shared fleet best practices and system benefits experiences with attendees from 300-plus FleetFocus product worldwide customers, including some of the biggest fleet users in North America. It is a mutually rewarding exercise in terms of shared best practice and proven solutions that can be effective for any size fleet on both sides of the Atlantic.

Gatti comments: “We now have less vehicles due to a restructure of our distribution network to improve efficiency, flexibility and performance. Of course vehicles are going to play a vital part in the quality of our service because our business is about delivering the mail and the availability of roadworthy vehicles is key to this. Each time a vehicle is not available through a breakdown or an accident, there is the potential to effect the operation, but without carrying lots of spare vehicles and associated costs, this is a balancing act. Using the system to recognise trends in terms of vehicle faults and driver error can allow corrective action by pre-emptive maintenance, bringing issues to the attention of manufacturers and driver training and education.”

He continues: “We receive reports not only about breakdowns but which vehicle breakdowns have had an impact on the quality of our service. The information from the M4 system is identifying why breakdowns are occurring, and which vehicles are giving us the most problems. We are then using this information, gained through the M4 system, to address issues before they cause breakdowns on similar vehicles or we go back to the manufacturers and discuss the problems with them.”

Gatti adds: “We feel that we are in total control of Warranty and the automation within M4 has reduced the effort that we previously placed on workshop staff. Our Storerooms and parts purchasing procedures are again under our control. By using the M4 Billing & Chargeback module, now we are also better able to understand our actual costs and assess our charging policies. There are so many aspects to managing a fleet operation, but we are getting to grips with them all.”

In the future Gatti and his colleagues want to expand the M4 system even further to possibly cover the full vehicle acquisition budgetary cycle, and job scheduling in terms of support and availability. Planning maintenance and scheduling the work outside of operational use will be key to vehicle availability and further enhance the role of M4 in RM. “We have taken the Vehicle Services Division from being a provider of vehicles to a professional fleet management organisation. It is without doubt a quantum leap for the business.” n

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