Fleet Logistics Round Table Supply Chain Management Fleet Management Fuel Save > 10% of fuel expenditure 1
WHAT MATTERS TO YOUR BUSINESS? INTERNATIONAL FLEET MANAGEMENT VEHICLES (repair, maintenance, Insurance, resdiuals etc) CONTRACT MANAGEMENT (full service, unbundled, legal, tax) OPERATIONS & CONTROL (service level agreements, actionable reports, cost, FTE s) FUEL (fuel economy) CO2 (car policy, change driver behaviour programmes, safety and security etc) SUSTAINABLE SAVINGS
Key Challenges & Considerations Before launching an international tender and /or taking a decision on a future operating model, it is important to analyze the as is define the to be structure and subsequent processes define the number of European suppliers (for bonus and network optimization) Understand the FTE and cost impact the HR and staff council position Legal (tax) implications Contractual dependecies
Optimize fuel cards operations & controls Analyze all fuel (card) management related processes Cards operations (handling cost) Cost of Fuel spend control, Car Policy enforcement, etc. evaluate and decide on optimal operation model and structure Optimized processes are pre-requisite to achieve additional savings through efficient combination of Online e-services International host-to-host models for all operational tasks (fuel card ordering, blocking, invoicing etc) set targets (mileage, tour planning, monthly initiatives etc.) fuel spend analysis (smart alerts, exception reports etc. ) follow up (actionable reports, clear internal responsibilites and/or SLA)
Fuel Card Process Re-engineering Efficient data access for efficient fleet spend controls bundled fuel cards operations and controls gives synergies of scale enabling international visibility of fuel cards cost from any office. enabling target setting (e.g. embedded in new car policy) and cost effective follow up of targets cost savings, transparency and cost avoidance (fraud prevention) Sustainable savings through pro-active fuel cost control (fuel economy, CO2 emissions) Define detailed key success parameters for the project / tender based on analysis and optimal operation model Engage senior management Kick off meeting on senior mgmt level (project sponsor) Start project including key countries Net overall Savings: > 10% Operations & Controls & Follow Up programmes (change driver behaviour, increase safety & security standards, CO2 most efficient driver of the month )
Fuel (card) management operating models 6
Fuel (Card) Management Direct Fuel Card contract (DFC) Customer is direct contract partner, hence retains full negotiation power Quality and timeliness of fuel card mgmt. reports are defined by the customer Customer benefits from own synergies (e.g. harmonized IT platform for host-to host service implementation) Direct access to fuel card data and direct benefits from Online Services PAN European (global) fuel card reporting Minimal involvement for standard operations (depending on IT harmonization) due to automated host-to-host processes, harmonized electronic invoice data, e-invoicing and automated cost-and driver behaviour controls through fuel card online Services) Tactical Fleet Management Tasks (e.g. increase safety, reduce fuel consumption, reduce C02 emissions) remain in customer responsibility
Fuel (Card) Management Full Service Leasing (FSL) Minimal involvement for standard operations (full outsourcing) Bundled services-and cost control information ( all in one solution ) FSL limits / rules out direct negotiations with fuel card provider (Reseller / Anti Trust) limits reporting capabilities and availability to FSL provider of the fuel card provider (no endcustomer accounts) limits pricing transparency Quality and timeliness of fuel card mgmt. reports are defined by the FSL system (linked to invoice cycles of the fuel card provider to Leasing company) FSL does not cover tactical Fleet Management Tasks (e.g. increase safety, reduce fuel consumption, reduce C02 emissions). This requires precise definition of KPI s and a clear implementation and sustainability strategy.
Fuel (Card) Management Fleet Management Partner (FMP) Minimal involvement for standard operations (depends on SLA definition) Customer is direct contract partner to its suppliers, hence retains full negotiation power Working with FMP ensures best price transparency and market overview benefits form FMP s synergies of scale (e.g. FMP s harmonized IT platform) Direct access to fuel card data and benefits from Fuel Card Online Services International fmangement reporting on fuel card expenses Working with the best suppliers on international basis Quality and timeliness of fuel card mgmt. reports are defined by the FMP system (linked to invoice cycles Fuel Card to FMP) FMP does not cover tactical Fleet Management Task (e.g. increase safety, reduce fuel consumption, reduce C02 emissions). This requires precise definition of KPI s and a clear implementation and sustainability strategy.
Unbundled models Fuel (Card) Management ABC-model - means, that 3 parties are involved in Fleet- and Fuel Card Management. This can either be Customer Leasing Company - Fuel company Customer Fleet Management Company Fuel company ABCD-model means, that 4 parties are involved in Fleet- and Fuel Card Management. Customer Leasing Company Fleet Management Company Fuel company Both models try to combine the best of FSL, FMP and DFC and it depends on the specific customer organisational structure and strategic framework which unbundled model is to be preferred. The overarching principle of both models is, that the customer has a direct business relationship to its suppliers. The customer defines the respective supplier tasks in Service Level Agreements (SLA s)
International business case 11
ADDITIONAL VALUE Customer vehicles Fuel demand Customer Existing card volume Total Total Total Country Country litres p.a. Austria 87 Austria 191.400 Austria 21.273 Belgium 251 Belgium 552.200 Belgium 2.332 Bulgaria 19 Bulgaria 41.800 Bulgaria 0 CZ 84 CZ 184.800 CZ 1.100 Denmark 189 Denmark 415.800 Denmark 4.989 France 1.132 France 2.490.400 France 13.030 Germany 2.959 Germany 6.509.800 Germany 1.982.447 Hungary 101 Hungary 222.200 Hungary 61.921 Italy 850 Italy 1.870.000 Italy 357.063 Luxemburg 55 Luxemburg 137.500 Luxemburg 68.209 Netherlands 450 Netherlands 990.000 Netherlands 355.579 Norway 96 Norway 240.000 Norway 234.682 Poland 131 Poland 288.200 Poland 0 Russia 89 Russia 195.800 Russia 0 Slovakia 75 Slovakia 165.000 Slovakia 0 Slovenia 24 Slovenia 52.800 Slovenia 0 Switzerland 344 Switzerland 756.800 Switzerland 0 Turkey 470 Turkey 1.222.000 Turkey 240.835 UK 1.348 UK 2.965.600 UK 951.835 Totals 8.754 Totals 19.492.100 Totals 4.295.295 International Offer - Direct Savings PRICING & BONUS 764.536 SHELL FUEL ECONOMY FUELS 701.312 OPTIMIZED PROCESSES 173.621 International Offer - Direct Savings 1.639.468 International Bonus Value 116.953 Additional International Value Elements SECURITY & FRAUD PREVENTION 172.996 CAR POLICY TARGETS & COST CONTROL 864.979 TOTAL ADDITIONAL VALUE 1.037.974 SHOW ME THE BEST VALUE
PROCESSES - benchmarking and cost savings Status quo minutes Euro minutes Euro minutes Euro Operational Excellence 7,00 2,33 17.528 7.788 210.336 93.456 order, re-order, block cards 1,50 0,50 4.377 2.189 52.524 26.262 error handling (cost centre, registration, purch.code) 1,50 0,50 4.377 2.189 52.524 26.262 Queries / double checking trx with drivers 1,50 0,50 4.377 2.189 52.524 26.262 re-envelope and send cards and PIN to driver 0,50 0,17 1.459 243 17.508 2.918 trx without fuel card / process other receipts 1,00 0,33 2.918 973 35.016 11.672 Invoice (data) handling - upload ETD per operation 1,00 0,33 20 7 240 80 Control fuel spend 5,00 1,67 43.770 24.438 525.240 293.259 Control mileage entry 1,00 0,33 8.754 2.918 105.048 35.016 fuel consumption / 100 km 0,75 0,25 6.566 1.641 78.786 19.697 non-fuel expenditure control (car wash, lubricants) 0,75 0,25 6.566 1.641 78.786 19.697 driver behaviour / fraud control 2,50 0,83 21.885 18.238 262.620 218.850 Total effort per vehicle / month (minutes) 12,00 4,00 61.298 32.226 735.576 386.715 "to be" - optimized process Fuel Cards operations & spend control cost - Current Inhouse Fuel cards operations & spend control cost - via Onlince card Services minutes Euro minutes Euro minutes Euro Operational Excellence - (h2h, EID, e-invoicing) 3,50 1,17 7.315 1.709 87.780 20.506 order, re-order, block cards 0,50 0,17 1.459 243 17.508 2.918 error handling (e.g. cost centres) 1,00 0,33 2.918 973 35.016 11.672 Queries / double checking trx with drivers 0,50 0,17 1.459 243 17.508 2.918 re-envelope and send cards and PIN to driver 0,50 0,17 1.459 243 17.508 2.918 Invoice data handling - upload EID 1,00 0,33 20 7 240 80 Control fuel spend 4,00 1,33 35.016 16.049 420.192 192.588 smart alerts 0,50 0,17 4.377 730 52.524 8.754 Online analysis 0,50 0,17 4.377 730 52.524 8.754 Online exception reports 1,00 0,33 8.754 2.918 105.048 35.016 Driver behaviour and fraud prevention / month 2,00 0,67 17.508 11.672 210.096 140.064 Total effort per vehicle / month (minutes) 7,50 2,50 42.331 17.758 507.972 213.094 Cards Operations & spend control reduction ratio vehicle / month fleet / month total fleet / annum vehicle / month fleet / month total fleet / annum 44,9%
OPTIMIZED PROCESSES - savings OPTIM IZ ED PROCESSES As Is (avg.) To Be Savings optimized processes Countries # veh Euro p.a. Euro p.a. Euro p.a. Austria 87 3.843 2.118 1.726 Belgium 251 11.088 6.110 4.978 Bulgaria 19 839 463 377 Czech Republic 84 3.711 2.045 1.666 Denmark 189 8.349 4.601 3.749 France 1.132 50.007 27.556 22.451 Germany 2.959 130.716 72.029 58.687 Hungary 101 4.462 2.459 2.003 Italy 850 37.549 20.691 16.858 Luxemburg 55 2.430 1.339 1.091 Netherlands 450 19.879 10.954 8.925 Norway 96 4.241 2.337 1.904 Poland 131 5.787 3.189 2.598 Russia 89 3.932 2.166 1.765 Slovakia 75 3.313 1.826 1.488 Slovenia 24 1.060 584 476 Switzerland 344 15.196 8.374 6.823 Turkey 470 20.763 11.441 9.322 UK 1.348 59.549 32.814 26.735 Totals 8.754 386.715 213.094 1 7 3.6 2 1 Implement fully electronic fuel cards operations via Host-to-Host and Online services bundle fuel cards operations- and controls leverage on synergies of scale from process harmonisation Card Management via Online services Optimize controls through smart alerts and Fuel Card Online services set targets (e.g. mileage, fuel consumption, Co2 emission etc) make expenditure transparent and follow up Benefits / Savings Operations & Control labour cost reduction > 40% Optimized processes are pre-requiste for sustainable savings The enabler for efficient fuel spend controls
New Car Policy & change behaviour - savings TARGETS & COST CON TROL Added value through enabled by Shell e-services (avg.) Countries % Petrol Diesel Fuel Euro p.a. Austria 1,0% 0 2.102 2.102 Belgium 1,0% 0 6.821 6.821 Bulgaria 1,0% 0 927 927 Czech Republic 1,0% 0 55.717 55.717 Denmark 1,0% 0 4.108 4.108 France 1,0% 0 30.389 30.389 Germany 1,0% 0 55.560 55.560 Hungary 1,0% 0 536.367 536.367 Italy 1,0% 0 21.652 21.652 Luxemburg 1,0% 0 740 740 Netherlands 1,0% 0 7.894 7.894 Norway 1,0% 0 579 579 Poland 1,0% 0 13.074 13.074 Russia 1,0% 0 54.907 54.907 Slovakia 1,0% 0 2.360 2.360 Slovenia 1,0% 0 729 729 Switzerland 1,0% 0 12.964 12.964 Turkey 1,0% 0 34.092 34.092 UK 1,0% 0 23.997 23.997 Totals 0 864.979 864.979 The average of savings of all tested customers is ~10%. For this calculation we chose to use only 1% in order to show the significant savings potential already at conservative levels. Savings to be derived from TARGET SETTING e.g. less business mileage through improved route planning. FOLLOW UP programmes and action per driver Efficient controls on European scale by using smart alerts & exception reports) TRANSPARENCY make all fuel expenditure transparent to all business vehicle drivers (e.g. monthly tables on IntraNet). Online tools & e-services supporting quick enforcement of a new car policy (=change driver behaviour). Typically cost savings are seen after 3 months) SHOW ME THE BEST VALUE
Thank You 16