Royal Mail extends contract with FMG Support after partnership delivers savings of £200,000
Issued Sept 16 2005Three year extension for FMG Support
Royal Mail has awarded FMG Support a three-year extension to its roadside repair and recovery contract, after fleet performance improvement measures contributed to reducing Royal Mail’s average cost per breakdown by 20%, and directly generated cost savings of around £200,000.
During an initial 12-month period, the partnership has delivered a number of tangible results through implementing a working process to effectively reduce costs, minimise vehicle off-road time and maintain tight controls over fleet performance. The measures have directly impacted on the cost-effectiveness and efficiency of Royal Mail’s fleet, positively contributing to overall business performance.
A number of strategic initiatives have been implemented to improve fleet efficiency. Through the use of management information reports generated by FMG Support’s £2 million bespoke computer technology, Ingenium, Royal Mail can reduce incidents by identifying reasons for vehicle breakdowns. Both parties pool expertise to rectify any problems, and work to maximise the resource within both Royal Mail and FMG Support repairer networks.
Paul Gatti, head of commercial fleet at Royal Mail commented, “Every aspect of our business is scrutinised to ensure that it is working efficiently and effectively. Partnering FMG Support has saved us time and money in many areas. Reviewing and modifying our approach on a monthly basis ensures that this is part of a long-term process of continual improvement. FMG Support offers unrivalled flexibility to adapt as our needs change, but real added value lies in the technology. Other providers could not offer us anything like the access to management information that FMG Support does.”
Data generated by Ingenium highlights the reasons for vehicle breakdowns. The top-line information allows both parties to explore the detail behind these causes, unearth the issue, and remedy the underlying problem. Through incident reduction, the management reporting systems play a key role in wider risk management strategy.
Royal Mail has enforced service-level agreements with manufacturers, and negotiated extended warranties on items such as clutches and gearboxes, by using these reports as supportive evidence. Currently, cost savings of £125,000 have been realised through changes to vehicle specifications.
Management information also supports Royal Mail’s control of its workshop network. Through stringent monitoring procedures, the number of jobs accepted by Royal Mail Workshop’s has increased, meaning that the business relies less on FMG Support’s extensive network of over 1,350 specialist repairers.
Nick Brown, chief executive, FMG Support added; “The service that we provide has actually led to a reduction in job volumes, meaning that in the short term we are not making as much revenue from the partnership. But it is fantastic for Royal Mail and it means that we are doing our job properly as they are meeting their objectives. The extension of the contract is evident that this is the spirit of an enduring partnership.”
Over the next three years, the partnership aims to implement further improvements to benefit the efficiency of the Royal Mail fleet, allowing Vehicle Services to further contribute to company’s wider business objectives.
Paul Gatti concluded; “We are proud to announce the extension of the contract as FMG Support is more than a straightforward supplier – they are classed as a strategic partner, because what they do directly impacts on our customers. We seamlessly combine our resources so that FMG Support manages the roadside repair and recovery function, leaving us to concentrate on providing the best possible service to our customers.”
ENDS
Issued on behalf of FMG Support by Propaganda Public Relations. For further information contact Amanda Lyons or Amie Pascoe. T: 0113 287 0123. F: 0113 287 0111. E: amanda.lyons@propaganda.co.uk
