Quick Glance Case Study: Fleet Vehicle Demand

“We have identified substantial financial savings by applying simple Lean principles, many of which have been achieved by eliminating non-value-add activities”

After completing a ChangeWise Lean Practitioner training course, one candidate submitted the following work-place project to gain their qualification to LCS Level 1c.

The Business Challenge

An increase in the number of employees within the business over the past five years resulted in a 12% increase in vehicle fleet, this surpassed our capability to absorb new demand within the Fleet Replacement Programme budget, as we had already exceeded budget for funding new vehicles.

As an organisation, we did not always implement the optimal value vehicle solution for new, unplanned vehicles following changes to a team’s organisational structure.

The Fleet Vehicle Replacement Programme process was complicated and undetermined, this resulted in employee frustration and a limited central view of the impact hiring was having on the business.

We could experience total hire charges of up to £1.145 million over the life of all hire vehicles. There was also extra work in the region of 0.1 FTE in having to determine budget provision for vehicles on a case-by-case basis. This approach generated poor levels of customer (internal) satisfaction as resolution via email was taking several months to complete.

A Lean review was required to ensure we were providing our customers (managers and employees requiring a vehicle), with a simple, efficient service, whilst delivering the best value vehicle option for the business.

Photo by Gena Okami on Unsplash

Key people involved from client site

A strategy group including members of the Senior Leadership Team, HR, Finance and employees who have experience of the Fleet Scheme, were involved in the various elements of solution delivery.

Lean Methodology Employed

DMAIC (Define, Measure, Analise, Improve, Control)

Various Lean methodologies were used including, Waste Analysis, Value Analysis, SIPOC, Root Cause Analysis, Cause & Effect, Value and Non-Value Add Analysis, SECAR Method

Lean Activities

To understand the current state, the following Lean activities were completed:

A SIPOC was used to map out the high-level process and help align the workshop participants, both in terms of their thinking around scope and their understanding of the process. It became clear that there was a large degree of variation within the existing process, and it would be too complicated and non-value-add to map every scenario within the current state. As a result, Root Cause Analysis techniques were applied to determine the key issues, and help to build a Lean design for the future state.

Key Findings

• No common, defined process in place
• No business owner for the process or process steps – and therefore, no accountability
• No incentive to move people out of hire cars
• Managers unaware of the incremental cost involved in staying in a hire car
• Business cases signed-off without complete information
• Employee needs not clearly defined
• Best whole life value solution not calucated or considered

In order to resolve the issues identified, workshop attendees were given 3 votes to identify where they believed attention should focus. Following completion of the options selection and process map, the root causes were revistied to determine if all would be addressed in the future state process.

Benefits & Outcomes

Solutions were designed using SECAR principles. This included creating email contact templates, a model to measure whole life value, revision of the business case template, and provision of a step-by-step help sheet, as well as:

• Significant reduction in the number of steps an employee needs to take to complete the process.
• Creation of templates for Whole Life Value Model, including a business case the customer (Business Lead) must submit for both an employee and vehicle.
• Templates include information on standard vehicle costs with drop down selection options.
• The use of email templates to ensure a consistent service for the customer.
• Accountability of the business case moved from HR to Finance. This approach enables Finance to be involved with every single business case. Previously, they did not have sight of costs and therefore could not plan budget provision accordingly.
• A communications plan to ensure customers have clear instructions regarding how they should obtain a vehicle as part of the recruitment process.
• An annual saving of £28,534 was also identified by opting to lease cars that would have otherwise been purchased.
• Using the same methodology, a further £77,338 annual saving is expected to be realised as part of future submissions.
• Savings of £229,058 per year through adopting a different solution to hire for new demand.

In Summary

The Lean review has enabled us to significantly reduce employee frustration through removing the manual submission of investment requests for approval of budget to purchase a car. In addition, we have identified substantial financial savings by applying simple Lean principles, many of which have been achieved by simply eliminating non-value-add activities. This Lean review will form the footprint for future reviews, including potential efficiencies from embedding the process within the electric and hybrid vehicle space.

Photo by Kenny Luo on Unsplash

Interested in looking at how Lean can help to save your business money whilst improving customer and employee satisfaction? Contact us at info@changewise.co.uk and let’s talk about how we can help.

ChangeWise believes employee engagement is the foundation for successful Change. Training and coaching your people to use simple continuous improvement techniques will enable your organisation to continuously adapt and stay ahead in a constantly changing and challenging environment.

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