Fleet News award winner: fleet of the year 1,001-plus vehicles - Rentokil

The journey from fleet manager to leasing company executive is a well-trodden path: many have switched, attracted by the ‘bright lights’ of working for a contract hire provider.

However, it’s not one-way traffic; occasionally the reverse journey takes place, with someone bringing their leasing and fleet management knowledge to a fleet.

That was the case with Richard Tiffany, global fleet director at Rentokil, the Fleet News Awards 2013 fleet of the year for 1,001-plus vehicles.

Tiffany earned his spurs at Interleasing, Lombard, ALD and, latterly, Lex Autolease where he was part of the bid team which won the tender for Rentokil’s business in 2007.

That contract involved the sale and leaseback of 4,000 vehicles with Tiffany working as the dedicated strategic account manager.

At the tail-end of 2012, Rentokil started to reassess its fleet operation, looking at a European structure and head-hunted Tiffany to become European fleet director.

Within three months his role had widened to become global fleet director as Rentokil sought a fleet policy covering all its markets from Asia Pacific to America within a centrally-managed resource.

Fleet News: What is the key priority for the global fleet strategy?

Richard Tiffany: At the moment I believe we do a good job of managing the metal, i.e. all fleet running costs outside of a driver’s behaviour. Our key global objective for 2014 is to manage the matter, i.e. the brain matter of a driver and how they can improve our risk statistics, lower our CO2 and reduce cost through fewer repairs and fuel use.

Managing the driver is one of the most challenging areas of fleet management and using tools like telematics, fuel exceptions and strong fleet management data helps us deliver new driver policies.

Keeping it simple is the key; it’s about intelligent exception reports to identify the people who are behaving the best and the worst to help us control the variable spend and to make people accountable.

The aim across all countries is to ensure Rentokil management colleagues receive one-page push reports which clearly identify the areas of focus within their cost centre.

FN: What are the steps to achieving this?

RT: We need to bring together data from different sources – leasing company, risk company, fuel reports, and telematics – into a simple report to give us the bigger picture.

My experience is that fuel cards provided by lease companies are normally more expensive than a direct fuel deal, but in many countries, such as Australia, America and South Africa, the fleet management company offers strong discounts via Shell or Caltex, so the MI reporting is more joined up.

We have recently appointed a fleet management supplier in South Africa who has the full solution on fuel, fleet management and telematics – a report for everything.

We can flick a switch remotely and make the vehicle drive at the variable speed limit. We can also calibrate the time zones and geo territory fencing within which they can drive so that when they park up the engine won’t restart if they are outside the allowed set-up.

This technology is delivered through the fleet management provider and its own GPS product using biometric finger scan technology.
In the UK we are working with Lex Autolease and Interactive Driving Solutions to develop the next level push reports. They should be completed in Q1.

FN: What stage are you at in creating a global fleet policy?

RT: 2013 was about setting the strategy and agreeing the fleet management suppliers in each country. We historically had more than 30 fleet management suppliers across the globe with no strategy from country to country.

My aim is to appoint a supplier in each country and rationalise the supplier base to reduce the core number down to around five for our fleet of 17,000 vehicles across 44 countries.

The key benefits of fewer suppliers and international framework agreements are better MI reporting and international account management.

The ideal situation is to have a core of three leasing partners; this may take 3-5 years to achieve.

FN: How do you get maximum value from your tenders?

RT: We complete a detailed study of our baseline costs before going out to the market so we can fully appreciate the benefit. Having eight years’ experience of working in new business and account management I understand how pricing works and what matters in a contract, so this allows me to have honest interaction with the bidders around what really matters to our business.

I insist the potential account managers take an active role in all the tender presentations.

Through the process we focus on future pricing and look for contract clauses reference to market pricing tolerances, overheads, interest rate, etc.

Our policy is to work on a sole-supply basis; we want our partners to share our strategic fleet objectives.

Our tenders focus on both the metal costs (basket prices, contract concessions, etc.), and on the matter where we share all our cost data and look for support on how we can work together to improve our future variable spend. If the overall package is competitive, the supplier is shortlisted. We normally shortlist two or three suppliers.

Once another round of detailed presentations and negotiations plus client references are completed then the winner is selected.

The winning company is the supplier that gives, in our opinion, the best service offering, strategic approach and best long-term cost savings.

FN: What else do you do to manage the supplier during the life of the contract?

RT: The roles and responsibilities are set out at the start; we connect the partner with our key business areas like procurement, operations and finance.

There are monthly fleet operational/SLA review meetings, quarterly strategic reviews and an annual review to cover the previous year’s performance and agree the next year’s objectives.

As part of the quarterly review agenda, any pricing adjustments on residuals, maintenance and interest rates are presented.

The meetings also focus on cost trending up or down, issues and progress on any initiatives.

FN: Where have you had particular successes with new initiatives?

RT: We have remapped the ECUs on 3,000 of our vehicles in the UK which saved us more than £300,000 in fuel. The remapping results show clear evidence that we deliver stronger benefits on the worst-performing drivers.

Telematics has also delivered significant benefits across many countries and the UK fleet deployment will be completed by the close of Q1 with annual benefits of £200,000 upwards.

The solution offers in-cab traffic light driver feedback which assists in guiding the driver to drive safer and more efficiently.

It also adds great value on excessive idling, out-of-hours use and general benefits to the operational route planning via track and trace.

The driver risk product is being amended to create more focused off-road assessments and training.

We have also made structural changes to realign our own internal costs globally by taking more services from the leasing provider and reducing our headcount.

It makes sense to allow the specialists to look after our day-to-day transactional fleet spend in every country. Not only do we save on resource, but also we see positive cost reductions of 5-10% on our variable spend.

FN: Where do you stand on the in-house resource versus outsourcing debate?

RT: We are here for strategy, car and van policy reviews, innovation and costs savings – we add value.

We outsource all our car/fuel policy management, pool vehicles, driver queries, accident management, SMR and insurance – there is no point in us doing something that the leasing company can do better. This is the solution that has started to be replicated globally.

Tiffany says Rentokil saved £3.2 million globally in 2013 delivering a lifetime benefit of in excess of £10m.

This is in addition to delivering more than £1m of savings in 2011 and a similar total in 2012.

Car policy, manufacturer negotiations, CO2 capping, driver deductions, lease lengths, spare vehicle recycling, buy versus lease and pay-on-use versus fixed assessment have all been completed. Rentokil is now working on technology and next level driver management.

All countries have been tasked with making further reductions this year, amounting to a potential combined reduction target in the region of £2.6m. The expected target for the UK is to exceed £1.25m.

“2013 was about getting the right suppliers in the right countries ready for 2014,” Tiffany says.

“The next stage is to look at the pure variable spend. In the UK we are squeezing everything we can.

"We are always looking for innovation – if there’s something new in the market, we want to know about it.”

Factfile

Organisation: Rentokil Initial
Global fleet director: Richard Tiffany
Fleet size: UK- 3,500 (1,400 cars, 2,100 vans); global – 17,000 vehicles
Funding method: contract hire (UK)
Provider: Lex Autolease (UK)
Brands on fleet: Vauxhall, Audi, BMW, Ford

Judge's comments

Rentokil has a solution for every problem. From non-OE parts to salary deductions for own-fault accidents, and engine remapping trials to end-of-contract controls, it has introduced initiatives to minimise cost in all areas of the fleet.

Worth noting are its outstanding reallocation policy which has reduced the fleet size and tackled a major issue for the business, and its wholelife cost methodology which has helped cut CO2 emissions for new car orders to just 110g/km.