Press Coverage
Click to download the article [PDF]
‹ Back to Press Coverage
06/10/05 Motor Transport – Three-pronged attack
Huddersfield based FMG Support calls itself a ‘fleet performance improvement company’ – the UK’s largest, in fact – but what does that mean? Toby Clark finds out
FMG Support is not just a recovery company but it is a new type of service that concentrates on incident management, which involves working with insurers. It has saved Royal Mail Fleet Services around £125,000 and is now a strategic partner, as well as a preferred supplier to the Transport Association.
The firm operates in three sectors: Roadside Repair & Recovery Management, Fleet Incident Management and Vehicle Rental Management. When it was founded in 1986, the firm began trading under the names AMC, Delta Rescue and Satellite Vehicle Rental, but in November last year the brands were all amalgamated into one.
The firm now provides services to large companies such as Royal Mail, Uniloads and Abbey Hill. It employs more than 200 people and has a turnover of £38m.
Roadside repair and recovery management aims to get a client’s vehicles back on the road as quickly as possible, managing the entire process from the first call to getting the driver and load to their destination. The firm has a network of 1,350 commercial recovery and repair operators, and a target time to reach a vehicle of 60 minutes.
The fleet incident management service is a related function, dealing with the legal, repair and cost implications of having a vehicle theft, vandalism or an accident. It is run by a dedicated contact centre and has a network of 150 primary repair locations.
All three services are controlled by an in-house IT system called Ingenium. Managing director Nick Brown, says: “The group as originally set up 19 years ago was a complete outsourced fleet management company, when contract hire was the flavour of the month. But it became increasingly difficult for a relatively small company to compete.”
“The first part of the strategy was to take elements and specialise,” he says. “In 1989 we became one of the first individual brokers of rental, then in 1991 we went into accident management. 1993 saw our first big leap into the commercial vehicle world. We established Delta Rescue, which was effectively coming out of the Octagon operation. But now FMG Support has completely superseded our other brands,” Brown says.
“We are a support services company in two ways — we are happy to be in a brand, or to work for leasing companies who are all things to all men.” Sales director Matt Child says that incident management comprises 50% of the business, with RRRM making up 30%; the rest of the business is concerned with vehicle rental management (see below).
“We’ve developed these three core propositions over the years. We’re firmly recognised as a roadside operation and we’re looking to that customer base to see — can we provide replacement vehicles and, if there is an accident, can we provide accident management services?” he says.
Brown argues that the commercial vehicle market hasn’t been as sophisticated as the car side, from the outsourcing point of view. “We’re about business process improvement, about economies of scale,” he says. “It’s all very well managing support services, but those services have to be up to scratch to start with. We’re only as good as the suppliers we have and the relationships we have with them, so we have developed a partner support scheme,” he says.
Child adds: “One of the key things is that we are independent of our suppliers. It’s a huge plus for the customer but whether our suppliers respond to us first or second or third very much depends on how we treat them. We have customer and supplier forums — they help us to write the system — it’s all about a consultative approach. The last thing we want is to send out people who aren’t credible representatives for us. We’re very successful with people who deal in critical loads — like parcels operators, and we’ve also been working with trailer companies like Hill Hire and Transamerica for some time,” Child says.
Nick Brown sees the household names in recovery — AA, RAC and the like — as becoming less competitive for commercial business. “Increasingly we’re seeing them not investing in the commercial side — they are primarily after the consumer, insured-product side. We can potentially see them getting out of it altogether,” he says.
Child adds: “It seems a defensive product for the AA and RAC, but we see it very, very differently! From a service and pricing perspective we think we provide the best repair and recovery service.”
Brown sees the insurance market as FMG Support’s biggest opportunity for growth. “One of the things we’ve found was that the influencer of the decisions as far as managing accidents was concerned was either the fleet manager or the risk/insurance manager who reports to the financial director,” he says.
Incident management isn’t all about dealing with the client company’s vehicle and load, says Brown. “A big part of what we do is third-party capture — we’re seeking to work with insurers and brokers to capture third parties and mitigate their costs. This can save money for all concerned. People need to invest in after-sales service because it’s about customer satisfaction,” says Brown. “We’ve found that Royal Mail’s spend has dropped with us, but it has extended its contract for three years — this is all about developing partnerships.”
The firm’s Ingenium software system, developed at a cost of more than £2m, helps to track the many issues that go into each incident. “It’s very easy to agree a pricing on a car or an LCV, but that’s not there for heavy CVs,” says Child. “A large percentage of the cost depends on the load. We have operators who operate predominantly with tail lifts, or refrigerators, or Hazchem. With the bespoke system we can follow it through.”
FMG Support is said to have saved Royal Mail Vehicle Services £125k so far, and is classed by them as a “strategic supplier”. Matt Child says: “We have an offering for the one-man band through to the Northgates, but it’s all business-to-business.” FMG Support is now a preferred supplier to the Transport Association, and Child says: “that was almost a standard sales process. There were two compelling reasons why they took us on. First, flexibility: each of their 60 operators has a different need. Secondly, we’re very competitive on rate — we can maintain our overheads at a good level”.
Though the firm has grown quickly, Child stresses that maintaining service is vital. “It’s about controlled growth — our existing client base is our focus,” he says.
Partners in recovery
Around 65 of the firm’s employees are involved directly in roadside assistance; George Gibbons is operations manager for the RRRM section. “We’re recruiting more ready for winter, and we also multi-skill people so that on a particularly cold Monday morning anybody can come in on the roadside assistance team,” he says.
“And we like to get them round to the agents too, so that they have some technical knowledge. But we prefer to go with people who have great customer care skills, and drip-feed them technical knowledge.”
Operators are trained to take details of symptoms, rather than to diagnose them, and to encourage full reporting from agents. This is essential — for example, a rental firm will want to know if there is any question of driver abuse.
Gibbons explains how the partnership programme works. “We have 20-25 roadside contractors in the partner programme. We asked: ‘How can we meet their needs by developing the systems we have, and what else can we do to improve the lives of suppliers — how can we work in a more collaborative, partnership fashion?’,” he says.
Nick Brown points out that, “Inevitably, the 80/20 rule applies — though we have 1,350 providers we probably spend 80% of turnover on a couple of hundred of them. We’ve got much tighter relationships with them in terms of measurement — KPIs.”
“We commissioned a survey of contractors and what was important to them. I’d have thought it would be all about the rate, but it’s more about the volume of work and the consistency of work. It’s about asking them what they want,” Brown says.
Gibbons adds: “We are trying to look closer at their issues — are they having trouble recruiting, for instance — and over a broader range. I think in the main the trade associations have done a good job with the recovery operations, but it’s the skill set that’s the problem.”
“If we can improve by sharing best practice, we shall. The website will have a forum, with a secure login, to allow them to do just that,” he says. Child adds: “On the basis of our relationships, these agents are investing in more kit. The capability of the equipment they’ve got is amazing.”
But communications with some of the smaller recovery operators can be primitive. “Some of these guys don’t have email — don’t even have a fax,” Child says. Many recovery operators use the industry-standard Turbo Despatch software. “It means we can get an acceptance or a refusal very quickly. Capturing the reasons given for a refusal is vital. I guess the key word is automation — we don’t want to be touching the same bit of information two or three times. We don’t have huge call centres but we have the commitment to technology,” he says.
Local firm for local people
FMG Support is based in Huddersfield, and intends to stay there. Nick Brown is keen to support local residents and businesses. “Our pay is competitive — let’s stop the talent leaving Huddersfield and keep them here. We have strong links with the university and with local colleges, which is particularly useful for part-time and seasonal work,” he says.
The firm’s headquarters and operations centre is remarkably quiet, despite the constant activity on the phones. All the contracting and design work was done locally, and the building incorporates a chill-out room for employees to relax in.
Managing the vehicle rental
FMG Support’s Vehicle Rental Management set-up can supply any commercial vehicle, in addition to standard car rentals. The emphasis is on service rather than the lowest daily rental rate. “We spend £7m a year on vehicle rental,” says Matt Child. “Some of our customers spend more, so we can’t compete on rate, but we can manage their rental. I have been surprised to see millions of pounds spent on rental, but much of it is very poorly policed.”
The computer system can ensure that the appropriate vehicles are supplied to each category of driver, and track, for instance, if a short-term rental is becoming an unnecessarily pricey long-term proposition. “It’s just giving the customer the chance to spend their money more wisely,” says Child.
