Company BSkyB
Business broadcaster
Head of fleet Euan Smith, supply chain director
Fleet size 2,700 vans, 170 cars
Funding method contract hire with Lombard
Replacement cycle four years
Brands Vauxhall Vivaro vans, Toyota Pruis cars

Ten minutes into our meeting, Euan Smith, BSkyB’s no-nonsense supply chain director, makes an astute point: “Fleet managers can’t do it on their own.”

He’s talking about driving environmental change, but he could just as easily be referring to any aspect of managing a company fleet – it needs support from board level.

BSkyB’s support comes from the very top. James Murdoch, company CEO, youngest son of the founder Rupert and a proud driver of a Toyota Prius, has a clear vision for the business and the role he believes the fleet of 2,700 vans and 170 team manager vehicles need to play.

“Four years ago, he decided we needed to up our game regarding the carbon neutral bandwagon,” says Smith.

“It’s driven by James because it is important for someone like Sky to be at the forefront of this.”

Smith’s challenge was to find ways to bring down the carbon impact of the supply chain, which includes fleet, as part of Sky’s broader focus on corporate and social responsibility (CSR). He needed to get buy in at all levels of the business.

“We can’t do it at van driver level unless we have established our credentials up front,” Smith says.

“The agenda has to be set at the highest level, that’s why we invested in Euro 4 diesel Vauxhall Vivaro vans – 30% of which use biofuel where it’s available - and why team managers are in hybrid cars. It’s also why we changed from executive taxi travel to Greentomatoes .”

Two years ago, BSkyB began installing automatic standby onto its set top boxes. More recently, it started giving away energy efficient light bulbs to customers free of charge.
“Our engineers see this and they understand that we are serious about the environment; that we are setting the example,” Smith adds. “They understand that they are not being singled out; it puts everything into context.”

The company is encouraging all its fleet drivers to take some personal responsibility for reducing their impact on their environment.

This year it introduced Appetite for Action which pairs engineers together and trains them to run one of three lesson plans in local schools – recycling, where food comes from, and the cost of food.

“We train them and it is then up to them to liaise with the school and run the lesson,” Smith says.

BSkyB also takes the more conventional approach to reducing its carbon output, including speed limiters and regular maintenance checks, but says Appetite for Action provides one of the carrots alongside the stick. It expects to carry out 600 lessons over the course of the next year.

“It is better than all the kit and technology to improve the vans,” Smith says.
“When the engineers are on our side and we have to make the hard decisions, such as having vans with no aircon, it’s a much easier sell. They understand the reasons.”

Over the past four years, BSkyB has reduced its fleet carbon emissions by 14% - it aims to cut emissions by 30% by 2012. But Smith recognises that any achievements are down to the level of support he gets at board level.

“Fleet managers can’t do it on their own,” he says. “We have an environment steering group chaired by the CEO. Each area, such as supply chain and marketing, has to report progress versus the target and where we are going next. We also have a CSR team that sits off the side that drives the action plan.”

Smith has been trialling telematics since April and is now assessing the results. He has teams of engineers trying three different systems, including one bespoke device, on 65 vans to find the best one.

The company is searching for an electric vehicle that is fit for purpose. It has already tried the Smiths Edison van which worked well in urban areas but is three times the capital cost of a diesel van. It is also a bit too big for BSkyB’s needs.

“We are in constant conversations about a truck that is the right size for us,” Smith says. “Thirty to 40% of our engineers have the right daily ranges for an electric truck to be the right vehicle for them.”

Technology plays a leading role in any BSkyB fleet solution – appropriately enough for a broadcaster. In July it introduced intelligent software to its property database which means the right engineers are sent to the right job first time.

It has already reduced the number of revisits and has cut out some appointments, such as simple upgrades where the box can be posted to the customer.

The system also tracks difficult access and red routes so drivers are aware of the situation in advance.

Smith is keen to increase the size of the carrot for his engineers via their wage packet. At the moment, 65 engineers get a quarterly bonus of 5-10% based on fuel economy and van damage. The bonus will rise when all the engineers go onto the scheme.

Fuel economy is based on a tolerant level of +/-5% of the fleet average. Damage is based on a 10% tolerance of expected brake and tyre life, as well as actual damage to the bodywork.

“The main cost driver is avoidance, which is affected by reducing mileage and reducing van usage,” says Smith.

“We are focused on cost but the face of Sky is our engineers – that’s where the customer value is so we need high quality engineers that go out to work that is essential. That’s where we drive down the cost.”

Replacement Cycles
BSkyB moved from a three-year replacement cycle to four years just over six months ago. It is already considering a further jump to five years.

“We weren’t seeing at three years a need to replace the vans,” says Euan Smith. “So we opted to save some money. The engineers were fine with that – it’s all about the right message.”

Each van averages 15,000 work miles a year. But they can also be used for private mileage via a salary sacrifice scheme.

In return for private use of the vans, engineers sacrifice £500 per month from their salaries. The cost is partially offset by BSkyB paying for their private fuel.

“We measure that usage to ensure we have sensible figures,” says Smith.

Smith is in charge of BSkyB’s global supply chain which includes the UK fleet division. He has a number of staff handling the day-to-day fleet responsibilities. They feed back the information that allows the company to take decisions on matters such as vehicle replacement cycles.

David Picton manages the fleet operation with direct reports in fleet, logistics and repair. He handles the big third party contracts while a fleet manager with nine staff oversees the reporting, tracking and servicing side.