Case Study: CHEP Australia Ltd Context The fleet was operational with no major incidents to trouble management, and the financier was meeting the needs of CHEP. On the surface –there was nothing wrong. Whilst working on another projects for CHEP, I became aware that the financier was working with minimal oversight. After flagging my concerns with CHEP finance, they commissioned me to undertake a quick operational review of the Tool of Trade fleet. This review brought to the surface issues relating to the internal policy, inappropriate lease terms and poor adherence to the contract by the financier. Whilst CHEP is a successful and well managed division of the very successful Australian based Brambles group, it did not have the right resources available oversee and interact with the financier. Action Stephen Friend was contracted to analyse and review the fleet operations. The brief was board, with core requirement to bring costs down. Working with Finance and HR, initially, and then Procurement the policies and fleet operation was methodically reviewed. Internal detailed data was limited and not compiled so extensive use of spreadsheet modelling was implemented. Policies (both internal and external) were reviewed, modified and implemented. The lease agreement was reviewed and the financier held to account. Ultimately this triggered a falling out with the financier as it became clear they where not prepared to honour the agreement on current vehicles, let alone additional vehicles. Consequently, a panel of providers was introduced with a more equitable lease agreement and accurately structured lease contracts. CLM was formed so that CHEP could outsource the management of the fleet to a trusted independent entity. Working with local CHEP admin staff, CHEP management, and the panel of providers, CLM became CHEP’s strategic manager of the fleet, A division of duties was created, with CHEP admin staff retaining much of the hands on role, while CLM provided the technical fleet management at specific key processes, reporting to CHEP finance, who retained ultimate control.
RESULT From 2008 to 2016, CHEP’s fleet costs have been reduce by 31%. This has been done while retaining the same core service to the end users, ie there has not been any downgrade of vehicle, changes in personal use, or major operational changes -just pure fleet management. A low cost, efficient, and ultimately very effective Tool of Trade fleet now serves CHEP. There has been long term stability, yet no “lazy tax” that can appear if management oversight is neglected. So what does this look like in actual hard currency. CHEP’s Fleet cost on the first 3 months of 2008 was $202k and the last 3 months of 2016 was $121k. Real figures and real ongoing long term savings.
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