A well-known, national road haulage business has saved in excess of £40-45K per year by switching their engine oil to a high performance lubricant that is proven to combat acids, deposit formation and premature wear and tear. Here we explore how putting more emphasis on seemingly small procurement decisions can have a big impact on operational efficiency and profitability.
Like all successful hauliers, Nicholls Transport’s blue-chip client base has been built on the strength of its reputation.
Working with FMCG companies, such as Nestle UK, often means there is a critical collection and delivery window. Aware that any interruption to business-as-usual would have a costly knock-on effect – for both the customer and Nicholls’ enviable track record – the family-run business has invested in contingencies that few, similar companies can offer. These include an on-site workshop to ensure its fleet is frequently attended to and an annual replacement policy that means the average age of its 100 Iveco Stralis artic vehicles is just three years old.
So, when a pattern of premature turbocharger failures forced the company to start replacing the turbos on all of its fleet as a precautionary measure, every 200,000km, the team was perplexed and acutely aware of the additional cost to the business: in parts, unplanned downtime and loss of man hours.
An investigation showed the root cause to be a build-up of oil deposits from the engine oil. After consulting Certas Energy, technical advisors identified that Shell’s Rimula formulation offered the best, future-proofed fit for its Euro V engines. The result? £40-45K worth of savings per year on parts alone and field trials extended to similar products within the Rimula range to ascertain further savings that could be made on its new Euro VI engines.
Out of sight, out of mind?
Nicholls was not alone in having hidden inefficiencies unknowingly hampering its 24/7 operations. The company did, however, have a major advantage over most other European haulage businesses. Had it not had its own dedicated engineers serving its vehicles on-site, it is likely the problem would have taken longer to identify and the cost to the business would have been even greater.
With the same personnel servicing and keeping a record of engine work, Nicholls quickly realised a common failure throughout its fleet had to be linked to something going into the system. Or, rather, that something was missing from the system.
How many other UK hauliers could have the same confidence that a hidden problem would be picked up as efficiently? If servicing is done offsite then it is inherently more difficult to determine failings fast. And the hidden cost of hidden problems soon mounts.
A change in mindset
The truth is that there is a tendency across the board to pay little attention to lubricant choice other than striving for the lowest cost. And, when problems arise, the starting point is to look at grander – often costly – solutions over the seemingly small changes that could make a big difference from a total cost of ownership (TCO) perspective.
Lubricants typically represent a small percentage of total running costs but, as the Nicholls Transport case clearly shows, choosing the right lubricant could potentially claw thousands upon thousands back to the bottom line – in time.
In the face of tough economic conditions, unpredictable fuel prices and stringent environmental regulations, cost control is more important than ever. Many markets are seeing growth and there is ample opportunity for it – but getting back to basics and really scrutinising operational outgoings, while actively seeking added-value, is a different way of thinking for many. Simply doing a straight cost comparison won’t evidence the potential gains in productivity, reliability, reputation and the other softer measures that are shown to impact on overall strength of position. Demand more from your supplier and determine a more profitable way forward, together.
Partnership is crucial
Viewing lubricant selection purely from a commodity mindset invariably leads to a purely transactional relationship. Commercial vehicle fleets are high maintenance and keeping operations running smoothly is beyond the remit of a standard supplier. By choosing a lubricant supplier that combines technical know-how with high levels of service, fleet operators can be more confident in engine productivity and performance.
Certas Energy is Shell’s largest contracted lubricants distributor in the UK, bringing together the technical, product and customer service capabilities the transport sector needs to keep moving and keep costs down.
In a move that allows each partner to play to its strengths, customers can benefit from access to a quality, market-leading product portfolio and comprehensive wrap-around service that includes the widest possible coverage, swift and reliable packed, bulk and even same or next day deliveries.
Shell Lubricants has retained its global market leading position for the tenth consecutive year (Source: Kline & Company, Global Lubricants Industry: Market Analysis and Assessment 2016 and Royal Dutch Shell plc Annual Report 2016). Furthermore, with Shell’s annual investment of $1bn in research and development, road haulage companies supplied by Certas Energy can be assured the latest technologies are at work in their greatest investment: their fleet.
Technical leadership
The Rimula product family provides offerings for the spectrum of Euro IV, V and VI vehicles. The lubricants have been optimised to significantly improve resistance to wear, deposits and oxidation - supporting fleet managers in addressing current and future challenges without having to switch formulation further down the line. Customers also have access to technical support services from Shell Lubricants including Shell LubeMatch and Shell LubeAnalyst.
By keeping one step ahead, Shell and Certas Energy can offer customers a service that is cost-competitive but, most importantly, ‘total cost of ownership’ aware.
To find out more, please contact Certas Energy on 0800 085 2314 (England & Wales) or 0345 303 4430 (Scotland).