Outsourcing Fleet Management Part 3

I think sometimes it's going to happen no matter how good you are. No matter how much engagement and buying you've had, they'll say yes. But really they mean no. And they will fix you later, no matter what happens. But we've seen some interesting things. You know, we've been doing some evaluation programmes. Side by side. And suddenly you look at the data they're providing and it's skewed. Funny how it always matches what they want. Retention of key information. I'm going to keep it. I'm never going to get it out. Which makes the supplier look poor. Cherry picking, all the usual sort of things. And white handing the supplier, and things like that. So this whole operational sabotage topic is interesting. And certainly don't underestimate their ability to play with you. Because they'll certainly do it. So, is there a solution to it? Look, I don't think so. Not directly. But, again, this is where I think, you know, interesting consultation always works very well. I think close involvement, getting an understanding of perhaps what's reality. And understand the culture of your organisation at the same time, can certainly assist in that area. So then, when it comes down to cherry picking, and this is a little bit different. This is not about a category. And you look at our list there. You know, we find they like to keep all the nice stuff, but they get rid of the really ugly stuff. If we look at Fleet, Fleet's got a whole pile of services within that category. And if we look at fuel, and maintenance, and procurement of vehicles, leasing etc. But let's look at registration as an example. So you've gone out with the group, and you've put a tender out there, and it's a holistic approach to Fleet, and part of it's registration, as an example. Please register the fleet. And, you know, my example there of an unregistered vehicle is quite disastrous. So, register the fleet for me. But then, you've left the table. And, operationally, they turn around, they say to us 'Look, we want you to use our CTP provider for the compulsory third party, the green slip.' Because, probably what's happened, when the broker's coming to do the comprehensive insurance, they've convinced them it would be a good idea to maintain the CTP component with them. Now, your provider might not have any experience with that particular CTP provider. Typically for commercial vehicles in certain states of a certain age, to relicense a vehicle, you actually need, sometimes, five pieces of paper. One including the green slip. So what then happens is, you get a failing. A failing in the area of say, the CTP doesn't come in time, the vehicle's not registered in time, the sticker hasn't gone out 21 days before. And this is when the finger pointing starts. Who's at fault? Well, you know, you should have registered the vehicle. And then you've got your supplier saying 'but hang on a minute. You've created a hurdle for me. You made me use another supplier. I've had to try to work out how their system works. And I'm not online with them. We don't have, you know ...' And all these events start to occur. And where's the KPI, and I'm sure Deborah's going to touch on this when she gets to the KPI topic. Because where is the KPI? Who's responsible now? 'You've put a hurdle in front of me, and you expect me to still achieve at the same time. It's unrealistic.' And this is where we believe, you know, a lot of this cherry picking occurs. And this starts to become the sabotage of the contract. And it's often small events like this that starts, I think, to erode the confidence of the users of these types of contracts to fulfill what was your original objective. Which is, hopefully, reduction of costs. And certainly, a much tighter supply chain. Another one that happens a lot in this particular category is, you walk away from the table, then all of a sudden we're left facing operational issues where they're saying to us 'We want you to use our preferred dealer, for the supply of the vehicle'. And we're going 'Well, why do you care? Isn't it more important that you've got the right vehicle at the location with its fuel card, ready to roll?' And you can take this example, move into, I'm sure, into some other categories. But you've again done it to us. We have this situation where, operationally, the team is saying to us 'Use my supplier for filling, to fulfill this part of the contract.' You probably were never aware of this discussion in your pre-tender process. Or even during the tender process. And we've come along. And this is something that evolves over time. We had one the other day. And you can imagine in Fleet business, we buy hundreds of motor vehicles every month. And we deal with most dealers across Australia. Something we're forced down the road to use is one particular supplier. And we're on the phone to them, and we didn't really want to use them because they don't exactly have the best track record, but our client's absolutely married to them, because '...that vehicle must come from them, because they are the greatest.' And, you know, you often wonder why. And you have to remember with vehicles, there's often lots of footy tickets, and entertainment, and events that happen like that. So we sort of tend to get used to having to use these suppliers. But this supplier's saying to us 'Well, no. Yeah, we know you're in Fleet. We know this is how the world normally works, but we want you to pay us five days before delivery of the vehicle.' And we're going 'Hang on a minute. We never pay for anything before we deliver it. You know. We'll pay you seven days after. That's, you know, industry standard.' And they're going 'No, no, no, no. No. Our client has agreed to this.' So we ring our client, same person, and they're just sitting there going 'Well, no, but we want to keep the dealer happy.' I mean, what's going on here? So, I think the challenge here is, is to try to now achieve KPIs that you originally set out for the objectives of the contract. Whilst maintaining, I think, a little bit of operational common sense. So we find that these are the types of things that get undone a lot, once you've left the table. Once that tender's been signed and operationally starts to move into, you know, into its life. Just summarising on that, I think it comes back to this finger pointing. And, again, this embedding. I think, you know, the more the procurement team's involved and embedded within that group during the pre-tender sample, during the tender, and post tender, especially for that first six months. The more that you'll see these types of events coming out. And you'll actually be able, perhaps, put on the umpire's hat. And that's your adjudicator bit. And again, bring some common sense to the table. Can you extract the information, pre-tender? Look, I don't know. But, you know, it would be good if you could. Something we do find that works exceptionally well, we've got quite a few pharmaceutical companies. And what they actually do as an industry, very well, was the non-competitive components, they actually get together. So they actually meet with their competitors and talk about Fleet in non-competitive categories and share ideas across it. These types of issues quite often come up with one client. And we find it soon comes up with another client at the same time, of that, in that pharmaceutical industry. So if you're in an industry where you believe that you can talk to your competitors, and you get the green light, and you believe it's an area that's non-competitive to your business, there's certainly a lot that can be gained from having a chat with your competitors about what they're doing, what works well for them in those types of categories. And certainly, from an operational perspective, that's where some, you know, some really big gains can be made at the same time. I think, if you can drill down into those buying groups to actually look at the big picture. Look at what you're actually trying to achieve organisationally rather than perhaps just the one component. As I said, Fleet's a little a little bit notorious for this because there's so many services bundled into that one arrangement, it's easy to pull it apart. Well, this is interesting. I rang marketing and said 'Look, send me a carrot and stick.' And they actually gave me a carrot on the end of a stick, which I thought was, okay, yeah, they probably didn't quite get the idea that, you know, it's a stick and a carrot. But in this case we're together, but, hey, you know, it works. Something we see in the opening of a lot of these tenders is the stick, but we never get to see the carrot. We find a lot that works exceptionally well, and Bella touched on it on his grass. 53 mil, 60 mil, 75% ex payment. And we've got a number of contracts that are actually structured like that. And they work exceptionally well. We've got a baseline number, and we work upwards and downwards to that number. I think unfortunately, we see too many sticks and not enough carrots. Whereas, and Tanya, I think you touched on it a little bit. If we can get some common shared goals out of this, and your supply can do well, and the organisation can do well, it can be certainly beneficial for everybody. But something I find a lot, and Deborah, hopefully you'll touch on this is that, what we find a lot is a lot of the KPIs actually don't really align well with the overall objectives. Quite often the KPI is an easy one to measure, rather than perhaps being a measurement of what you're really trying to achieve. So, if I had anything for you at the wrap up, I think getting involved deeper within the groups who are actually going to open and use these contracts, before the tender goes out. Of course you're there during the tender process. But please stay on board for a while to make sure that everything's working well. Because it's quite amazing how it can fall apart when you when you guys walk out the door, and the two parties are sitting opposite each other, and you see the glint in the buyer's eye. And you think, 'Oh gosh, here we go again.' Thank you. Any questions? Or, I think we've got the forum this afternoon, anyway, which we can pick up any other additional items. Too easy. Thank you.