By Francois Oosthuizen
In the current economy, cost optimisation is a major focus for companies across the globe. There are many factors that contribute to rising costs; however, one of the biggest challenges faced by many of these companies is reducing fuel expenditure. While South African consumers can anticipate some relief with fuel prices expected to drop by approximately 90 c/ℓ (and 70 c/ℓ for diesel) in July 2019, we saw fuel prices increase by 56 c/ℓ in the first quarter of 2019. Taking a focused view on fuel price hikes, political uncertainty in the Middle East and the impact of the political landscape on the economy, Servest took a long-term strategic view focused on digitisation through vehicle telematics in order to cut down on overall fuel expenditure and improve our bottom line.
We scrutinised areas of high expenditure and began to aggressively implement our integrated solutions model across the company, and the results speak volumes.
In just seven months between October 2018 and April 2019, we’ve been able to save up to 12% on our total fuel spend. We designed a long-term analysis of fleet utilisation that focuses on evaluating our clients’ requirements, which will further optimise routes and team deployment.
As part of the strategy, we changed the speed limit on our vehicles from 120 km/h to 100 km/h. Further, we invested in defensive awareness training for our drivers to promote safer and more efficient driving.
Interestingly, despite wild hikes in fuel prices that impact our fleet of more than 900 vehicles, we have been able to reduce the cost of our fuel consumption by 274,922 ℓ, enabling a 12% saving compared to the same eight month period in the previous year.
Another cost consideration is occupancy and use of our premises across the country. When we analysed our overall space utilisation, we found that we were only using 60% of the area available, despite the fact that to the naked eye, it looked as though we had in fact over-utilised the space.
We assessed the viability of moving operational offices to centralised headquarters; we looked at our warehousing needs, logistical considerations, travel time and client locality; considering the environmental and business benefits to establish the best solution for optimal use of space.
All these assessments allowed us to design the comprehensive model that guided the current location of Servest’s headquarters, which has realised considerable space optimisation and cost savings. The space planning exercise has also been critical in realising energy savings, facilitating ease of communication and improved overall workflow.
Without a doubt, an integrated model of exploring facility needs can go a long way towards reducing costs, complexity and limiting business risk.
So the next time you are looking for a more holistic approach to cost optimisation for your facilities, Think Servest.