SITA UK embarks on centralised fuel management strategy
The decision taken by SITA UK to centralise the administration of its fuel purchasing has allowed better visibility and management control of road diesel – one of its principle operating costs.
So far over 40 depots with bulk storage tanks have been incorporated onto the network, using the Merridale FuelFX monitoring and reports system. Having been relieved of the admin burden, one of the SITA depots at Yate, South Gloucestershire, has introduced performance league tables to help increase awareness and improve fuel efficient driving.
SITA UK, one of the UK’s leading recycling and resource management companies has over 300 facilities across the United Kingdom providing waste collection and disposal services to some 12 million households and 40,000 businesses. The group operates in partnership with local authorities throughout the UK as well as operating its own commercial recycling business.[quote]The Fleet office also provides a weekly report so we can keep an eye on what fuel usage we have had and that each issue is attached to a vehicle and which driver has drawn the fuel.[/quote]
Fuel management is handled by the fleet management team which is located in Weston-Super-Mare alongside the group’s finance, accounts, and procurement departments.
Up until last year SITA depots were responsible for their own supplies. This resulted in various local arrangements. Most of the larger units were using bulk storage tanks with secure facilities for dispensing fuel on site. Smaller depots were obtaining fuel from retail forecourts using card accounts and In some other cases, fuel was being obtained under arrangements with local authorities.
As a transport based business, SITA has already harmonised its fuel supply by negotiating bulk supply prices with two major oil companies. This has now been followed up with a cross company project to centralise monitoring and stock management. This involves a major capital investment to upgrade existing depot tank facilities and implement a corporate fuel usage monitoring and reporting system.
Merridale fuelling equipment and the associated FuelFX reporting system was chosen as the common platform since this was already being used successfully by a number of SITA depots.
“We wanted to reassure the depot managers that central management would reflect existing procedures and we didn’t want them to worry about ‘Fleet’ taking responsibility and then changing things,” explains Fleet Administration Manager, Sharon Gane “During the implementation we recorded the depot tank capacities, set a re-order point and delivery requirements. We are now monitoring stock levels every 24 hours and the Merridale system flags up any tank that reaches the re-order level. We then advise the depot manager that an order has been placed and expected delivery date.”
Around 40 sites have been brought under the fleet administration so far and the programme is on-going with something like 200 other sites around the country under review.
A survey of these sites is being carried out to establish fuel usage, current fuelling arrangements and the cost benefits for bulk storage versus card accounts. As priorities are determined then Merridale engineers will undertake site surveys to review existing facilities.
Sharon adds: “The site managers have been involved in setting out their operational requirements and planning the implementation for their sites. Although the emphasis so far has been on white diesel for road going vehicles, we have included a few sites that also have bulk storage for red diesel (gas oil) tanks.”
The next phase of the project is to review the red diesel facilities. This is used in offroad plant such as loading shovels and fork lift trucks, which are used mainly at transfer stations and sites handling household waste.
Business benefits One example, where the project has highlighted the opportunity to make strategic decisions has been demonstrated recently. The SITA refuse collection vehicles in this case were drawing fuel from a council depot. Following the review, the decision was taken to switch location of this fleet to a nearby SITA site in order to access fuel directly from the company’s own fuelling point. This has resulted in significant savings compared to the cost of fuel provided by the council depot.
Sharon points out that without any overall fuel management strategy this type of decision would not have been possible without an option for alternative and less costly arrangements.”
“And of course our purchasing power allows us to negotiate good prices from the oil companies. This is allowing us to drive down costs in depots which did not previously have access to bulk fuel supplies.”
Depot Benefits From the operational point of view the introduction of Merridale reporting software has eliminated the laborious administration of cost accounting and reconciling stock since this is all now being recorded automatically.
At the SITA depot in Yate, South Gloucestershire the upgrade has resulted in a larger capacity 26K litres tank, allowing more flexibility in the event of any problems on the supply of diesel from the oil companies.
Matt Canning, the Contract General Manager at Yate has been involved with the Merridale implementation at two other SITA depots, having just transferred from Warwick.
“The implementation went in very smoothly; there were no issues with it. Merridale is very easy to use for dispensing and for reporting financially when doing the month end returns the reports that come through from Fleet Management are easy to understand and easy to work out how much fuel we have used.”
Matt continues. “The Fleet office also provides a weekly report enabling us to keep an eye on what fuel usage we have had and verifying that each fuel issue is attached to a vehicle and which driver has drawn the fuel.
“Our current contract involves 65 vehicles of which there are about 35 located at the Yate depot and the remainder operate from a sister depot at Cowhorn near Warmley, which has also been upgraded with a larger tank and Merridale dispensing facilities.
Apart from standard refuse collection vehicles, the depot has some small vans and open stillage vehicles for glass and cardboard. Most domestic waste is sent to a SITA landfill in Packington, Warwickshire so the transport requirements range from kerbside collection to long distance haulage.
Visitors from other SITA sites can fill up provided their vehicle is registered and has a Merridale key. We also keep an admin key to provide fuel to other company vehicles. We notify the Fleet office of these transactions so the relevant inter- department charge can be made.
As well as the vehicle key, each of the drivers has a PIN which must be entered at the pump to authorise each transaction. We have 23 drivers at Yate and we are starting to use Merridale reports to analyse individual drivers’ fuel economy performance. League tables have been introduced to show how driving style makes a difference.
This provides some friendly rivalry and adds interest as we can highlight the most improved drivers. They can also see how their SAFED training does help to reduce operating costs.