Hörmann

The issue

Hörmann had become concerned at the rising financial cost of their vehicle fleet and in particular the rising fuel costs to the business. The fleet had always been 'fully expensed' meaning that Hörmann would pay all private and business fuel for their employee's vehicles. Most field staff were travelling approximately 33,000 miles over the year and the average driver's business mileage is reportedly 85% of this. In addition to paying for fuel, the cost to Hörmann included a Fuel Scale Charge as well as a National Insurance Contribution. Hörmann sought the advice of Activa in order to begin the introduction of improved processes to advance cost efficiency within their business.

The resolution

Activa began by understanding how Hörmann's fleet had been operating and quickly established areas in which changes and ultimately savings could be made. It became immediately clear that the fuel policy was in need of urgent change and suggested that Hörmann reconsider the way they dealt with fuel reimbursement. Activa identified that significant savings could be made by simply re-evaluating the need for fully expensed private fuel. It was put forward that if Hörmann employees were responsible for funding their own private fuel they may also become be more conscious of the economy of vehicle they choose in the future.

The impact

The Changes Activa put forward are only now being implemented and it is estimated that there will be many more potential savings. The new policy has the possible effect of reducing the total mileage driven, vehicles will now return at the end of contract with lower mileage. The result could potentially encourage less service, maintenance and repair costs while enhancing the resale value which would lower monthly rentals for Hörmann. Moreover, when employees pay for their own fuel, it is expected that they will be more inclined to select cars with improved fuel consumption figures and will consider the impact of their driving style which can also potentially reduce costs significantly.

"
Hörmann sought the advice of Activa in order to begin the introduction of improved processes to advance cost efficiency within their business. Activa identified that significant savings could be made by simply re-evaluating the need for fully expensed private fuel."

Paul Eadie
Company Secretary at Hörmann

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