Driving transformational change
Optimising your fleet performance
CONTENTS
03 OUR MISSION
04 MARKET OVERVIEW
06 WORKING WITH OUR CUSTOMERS
08 OUR UNIQUE DELIVERY
10 LAFARGE CASE STUDY
Our mission
Babcock’s mission is to transform how customers in the mining
and construction industry optimise the availability of their
assets to improve performance and reduce whole life costs.
Complex mix of vehicles, equipment and facilities can only deliver optimum performance if their maintenance, availability and procurement are underpinned by a specialist approach to asset management.
Babcock recognises that whilst the careful management of certain assets is critical to the operation, it may not be core to the development of the business. By Babcock delivering this service for customers, they have the confidence to instead concentrate their internal resources on more valuable areas that help the company to develop, such as mine permitting and planning, processing and logistics.
Our capability is based on years of experience working with companies that have similarly complex and technical portfolios of equipment. This includes flagship global airlines, the defence sector, the emergency services, and public sector organisations – all of whom trust us to manage their ownership and operation of more than 30,000 vehicles and equipment.
Our mission is to develop partnerships at the heart of our customer operations – helping mining and construction companies optimise their equipment and plan together for future success.
Market overview
Babcock helps mining and construction organisations optimise
their asset availability, whilst reducing the whole life costs
of their complex fleets of equipment and vehicles.
Globally each year, the aggregates industry moves 25 billion metric tonnes of construction aggregates, and the top 10 mining countries produce 6 billion metric tonnes of coal - the management of fleets that move these huge volumes are absolutely critical to operational effectiveness. They can mean the difference between business success and failure, and have a knock-on effect across a multitude of industries.
Traditional in-house approach
Until now, businesses in the mining and construction sector have taken a traditional approach to asset management, running the operation of vehicles and equipment from within the company. Given the critical importance of these assets to the operation of the business, it is perhaps clear why fleet management has not been outsourced.
However, increased economic pressures and a new and unique offering from Babcock into the market has seen this mindset begin to change.
Bringing capability to the market
Babcock took this proven expertise into the mining and construction sector, signing an exclusive deal with Lafarge, a global leader in building materials. The 10-year deal sees Babcock manage Lafarge’s fleet of more than 1,000 vehicles in the UK, U.S. and Canada.
Babcock is set to transform the way
that assets are managed within the mining
and construction sector. Babcock’s new
approach delivers increased asset
utilisation, higher production rates
and a lower cost per tonne.
Neal Misell
Working with our customers
Babcock works at the heart of its customers’ operations,
planning together for future success.
All our customers are driven by the need to address two of their most pressing concerns – reducing the cost per tonne and improving the performance of existing resources. They can achieve this by building a long term relationship with Babcock as a trusted partner, focussed on working with them to deliver these outcomes.
Well managed complex assets
Assets can be complex for many reasons - from their technical detail to their geographical spread, or the skills needed to service and maintain them. Babcock has a pool of knowledge accumulated through working across a variety of industries, which means we have addressed most of the problems our customers face in managing complex mixes of assets, and can work with them to solve them.
A single independent partner
As the single point of contact, Babcock provides an independent bridge between customers and manufacturers, supporting any mix of assets with total objectivity. Babcock helps customers to alleviate the management of an intricate supply chain by ensuring they only need to work with one organisation from start to finish.
Shared risk and reward
Our experience enables us to help customers understand their risks and reduce their impact. We work in partnership with them to share those risks, mitigating their impact today, and planning together for mutual future success. This can include innovative financing models that inject cash back into the customer’s balance sheet.
At the heart of the operation
Our combination of proven management, analytical and engineering experience helps customers make the right strategic decisions. This places us at the core of customer operations.
Babcock is committed to ensuring the highest levels of health and safety, ensuring that best practice, innovative programmes and experiences are shared both within the organisation, and in working with our customers.
Greater customer focus
While equipment and vehicle assets are critical to the customer’s core output, the value of internal resources can be maximised by focussing on areas that grow and develop the business. By working with Babcock, customers have the confidence to focus on their core business.
Innovative solutions
Babcock is not bound by existing industry technologies, processes or systems. We encourage our customers to think differently about how they procure, manage, and decommission their assets to get the most from them. From innovative finance programmes to customer specific IT systems for gathering and interrogating data, we work in partnership with customers to consider all the options to help them achieve their objectives.
Custo
mer
in-house asset manag ement Training Spar es Resale Lif e Span Legislation Disposal Help Desk Systems Supply Chain Repairs Unscheduled Maintenance Scheduled Depr eciation
Capital Costs Fuel & Consumables
Operator Costs OEMs Customer Complexity High Risk Babco
ck led asset managem ent Fuel & Consumables One monthly fee through ALCAMiE Operator Costs Customer Complexity Low Risk Whole Life Costs Reduced Service Transformation Transferring Risk
Our unique delivery
Babcock has taken a unique approach to asset management, providing critical visibility over national and international fleets, as well as delivering services over the whole lifecycle of an asset, from procurement through to disposal. This approach includes ALCAMiE (Asset Life Cycle Availability Management in Engineering), Babcock’s proven delivery model. This is particularly powerful, meeting both customer key drivers and delivering a range of outputs that enable transformation in how their assets are managed. Encompassing web-based fleet reporting, core asset management, dedicated managed service centres and the customer accounting function, customers can benefit from increased availability, savings of around 10-15%, reduced costs and processing, and transference of risk.
The whole lifecycle of an asset
ALCAMiE encompasses the four stages in managing the whole life of an asset as follows:
Strategy, design and finance:
Procurement, construction & transformation:
Operating, maintenance & monitoring:
Disposal, renewal & recycling:
This includes optimising the fleet; fleet planning and advice; research and development; asset financing; purchase and leasing
Meeting operational requirements including service desk; movements, collection and returns; condition monitoring, samples and upgrades; statutory compliance; asset availability, service and repairs; reducing operating costs
Delivering a new service that includes managing the supply chain; fleet MIS; training; mobilisation
This includes regular reviews of forecasts; auction service; market watch and component life-span knowledge
It’s clear to see the value that
Babcock has delivered, even in a
short period of time. Their excellent
fleet management reporting tools
enables better and quicker decision
making.
Key customer driver Optimise availability, confidence and performance Key operational outcomes • Service transformation • Increased availability
Key customer driver Core business focus for competitive advantage
Key management outcomes • Focus on core business
• Transference of risk
Key customer driver Reduce ownership and whole life costs
Direct financial savings • Circa 10-15% savings • Lower asset base and
reduced capital costs
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ALCAMiECo
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ALCAMiEM
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Service
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ALCAMiEC
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Fu
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ALCAMiEKey customer driver Reduce costs and business ‘noise’ created
by non-core activities
Indirect financial savings • Reduced processing
• Lower costs
ALCAMiE is Babcock’s proven delivery model that includes the
following core services:
Fleet reporting
At the core of ALCAMiE is a system of web-based reporting that provides organisations with the granular information they need, to make the right strategic and operational decisions about their fleet. The output is a day-by-day extract of what is happening in the world of the customer’s assets, offering total visibility of performance, cost of ownership, and availability that helps managers make whole life decisions. ALCAMiE allows Babcock to take a smarter approach to optimising asset availability as well as planning a more efficient maintenance schedule by matching accurate fleet availability to the customer’s daily requirements for each asset.
Core asset management
Accurate reporting and decision making is underpinned by the right information. Babcock manages detailed customer equipment based information about each asset including equipment criticality, warranty information, service intervals, usage hours and planned availability. This data supports the decisions that ensure we get maximum performance at lowest whole life cost. For each piece of equipment, we make the most of its role in the fleet, right the way through to renewal. This includes
Managed service centre
Babcock implements a single integrated process within a dedicated managed service centre. This means we can see a job throughout from the initial call, managing suppliers, keeping the customer informed, to formally closing the job once completed - inputting data into the core asset management system throughout the process. This means we are able to quickly prioritise jobs according to their criticality, because we have sufficient data about each asset to understand the impact of their downtime.
Customer account function
Our unique combination of fleet reporting, core asset management and a managed service centre enables Babcock to play the entire programme back to customers, enabling them to make quick and accurate strategic decisions, saving time and money. It also allows us to use monthly reviews to flag upcoming issues so they have minimal impact on commercial operations.
Summary
ALCAMiE is unique. It is Babcock’s way of working in partnership with customers to simplify the way they manage their portfolio of complex assets using industry leading technology and best practice.
Lafarge case study
Babcock is helping Lafarge to reduce costs and increase output
at each of its sites, by transforming the way it manages a
complex fleet of Mobile Equipment.
Background
Lafarge is a world leader in building materials, operating in 78 countries and employing more than 75,000 people at nearly 2,000 sites. At the heart of Lafarge’s business is a fleet of Mobile Equipment, which enables the company to produce and deliver its products. Ensuring the right combinations of assets are always available in the right place, at the right time, is critical to Lafarge’s successful operation.
In July 2011, Lafarge signed a 10 year contract with Babcock to take on the management of its UK fleet – more than 400 assets across 70 sites. Babcock has responsibility for Lafarge’s fleet of Mobile Equipment across its Aggregates and Cement businesses, aiming to optimise efficiency and drive down whole life costs.
The second phase of the programme saw Babcock managing over 1,000 assets for Lafarge, following the U.S. and Canada being mobilised in December 2011. The £100m contract was signed with Lafarge to implement the service across its North American Aggregates and Cement sites.
The challenge
• To achieve a swift and seamless mobilisation within four weeks of the contract signing
• To optimise the way Lafarge manages its assets, allowing it to focus on its core quarrying activity
• To help Lafarge reduce the cost of increasing output
The solution
ALCAMiE, Babcock’s proven asset management solution, was customised to support the individual needs of Lafarge’s programme.
Babcock worked in partnership with Lafarge to communicate the new programme to the supply chain and Lafarge employees at sites around the UK. A joint working group was established and communicated the changes to every supplier and every site manager in the UK. An event was held for Lafarge managers, which included a joint presentation on the new programme, and a comprehensive range of materials for cascading information to their teams.
Babcock gathered the data required to build a UK-wide view of Lafarge’s fleet. This was used to categorise assets according to their criticality to Lafarge’s operations, and new maintenance schedules were developed. This was a huge task with every individual vehicle and piece of equipment assessed individually.
The final part of successfully mobilising the contract was to set up a thorough annual review process that would ensure site managers had a clear view of their equipment and vehicle requirements for the year ahead.
This information allowed Babcock to plan how to ensure availability for supporting these requirements from day one. By making this part of the mobilisation process, Babcock immediately encouraged Lafarge to start thinking about its future fleet as well as its day-to-day operations.
The outcome
Within the first eight months of the contract, Babcock successfully:
• Completed the annual review process for the year ahead with Lafarge, ensuring that sites have the capacity to meet demand
• Committed £10m of new equipment to replace aged or worn out equipment including five Caterpillar 777F Mining Trucks and a Komatsu PC 2000-8 Excavator, from July 2011 to November 2012
• Met stringent equipment availability targets across the entire Lafarge UK fleet
• Undertook over 2,000 scheduled and unscheduled maintenance events
Moving the partnership forward
Since 2011, Babcock has delivered the UK contract, and it has had an immediate impact on Lafarge’s business. Babcock is constantly challenging Lafarge’s traditional approach in order to maximise the efficiency of the fleet, and ensure that the whole life costs of an asset, including warranties and training, is reflected when making decisions.
Babcock spoke of a seamless transition and they achieved this admirably.
They put a lot of time into understanding our needs and expectations, and
they communicated well with our staff and our supply chain.
Xavier Therin
VP Land Mineral Resources and Mining, Lafarge
Benefits delivered
Technical added valueNew practices introduced including equipment telemetry to ensure highest levels of production
Improved specifications
Improved machine specification negotiated with key equipment manufacturers with no cost premium.
Machine performance management
ALCAMiE data enables quality information for managing preventative maintenance and new machine procurement activities.
Increased availability
ALCAMiE automatically prioritises non-essential maintenance defects, reducing downtime and increasing equipment availability.
Supplier management
New supplier agreements have improved communication, performance and maintenance planning.
Better warranty terms
Standard warranty terms renegotiated offering a wider scope and an increased warranty period.
Ministry of Defence
Babcock is providing global critical logistical support to the Ministry of Defence (MOD) to sustain its operations across the world.
The challenge
• To optimise the MOD’s Construction (C) Vehicle fleet, providing guaranteed levels of availability 24/7 with increased value-for-money
• To manage and maintain the whole lifecycle of the MOD’s C-vehicle fleet of over 2,500 assets, 167 different equipment types in 16 depots within the UK, Germany and Cyprus
The solution
This Private Finance Initiative (PFI) contract forms part of a 50:50 joint venture company, set up by Babcock and Amey, under the name ALC.
At the start of the contract, 4,000 items of equipment, spares, special tools and test equipment, previously owned by the MOD, were sold to ALC, transferring the risk from the customer to the supplier.
Utilising Babcock’s partnering approach, ALC helped the customer achieve the maximum benefit from the service. It reviewed the whole fleet, bringing up to standard the required amount of equipment to meet future requirements. ALC also started the replacement programme earlier, increased stock holding to achieve
spares demands, and recycled equipment to reduce the cost of replacing deficiencies.
Local briefings and one-to-one sessions with users were held to ensure the customer understood the change processes and a MOD Service User Guide was produced. A joint working group was formed with representatives from the customer, end users, the contract management team and the service provider to monitor all aspects of performance throughout the contract.
The management information system was set up to operate within the defence information infrastructure, enabling joint management by the military and ALC.
The outcome
• C-Vehicle type equipment halved to 2,000 items
• Overall capability increased - £110 million invested in 1,780 new pieces of equipment and the remainder refurbished
• The maintenance burden on the customer reduced
• Named the best PFI deal of the year 2006 and Best Operational Defence Scheme 2007 in the Public Private Finance Awards
National Fire and Resilience
Babcock is ensuring the UK fire and rescue service has an effective civil contingency and resilience capability.
The challenge
• To maintain and manage the New Dimension fleet of vehicles and equipment, offering guaranteed availability of more than 650 vehicles and 175,000 stock items of equipment while providing increased value-for-money
• Ensure that this national capability is available for deployment by any one of 46 Fire and Rescue Services across England and Wales in the event of major incidents, including floods, terror attacks and urban search and rescue for collapsed buildings
• Manage a split of ownership whereby the customer retains ownership of vehicles but Babcock owns all other equipment
The solution
At the contract start, Babcock visited all 46 fire authorities, working collaboratively with the customer to build understanding and support for the change programme and our ability to deliver it.
As the New Dimension fleet is distributed across the country, it requires real-time instant access to information. Babcock developed a bespoke securely-encrypted network specifically for this level of asset tracking. Daily and monthly reports from the new system
give fire authorities and fleet teams enhanced access to fleet availability, service level agreement and key performance indicators.
In addition, the new system has enabled thousands of New Dimension vehicle and equipment service records to be housed on a secure internet portal where mission-critical records can be accessed 24/7 in real time. Babcock created a purpose-built central maintenance and logistics facility in Leicester that provides designated disaster relief equipment 24-hours-a-day nationwide, and a team of mobile engineers that respond to defects and communications problems around the clock.
The outcome
Babcock has overseen and resolved an average 600 defects and 350 scheduled maintenance events each month on the New Dimension fleet. This has provided the following customer benefits:
• Increased fleet availability
• Reduced operating costs
• Transfer of maintenance risks
• Improved management information
• Refined asset procurement
British Airways
Babcock has helped British Airways increase the availability of its fleet of airside vehicles and equipment while providing value-for-money.
The challenge
• Undertake fleet management of a 4,000 strong fleet of vehicles and specialist equipment of huge variety ranging from aircraft tugs, to baggage trailers and passenger coaches
• Optimise asset availability - decide when to procure new assets and when to dispose of older ones in a timeframe that delivers the optimum value-for- money to British Airways
• Oversee the fleet inventory, workshops, IT systems and process
• Manage the TUPE transfer of 350 existing British Airways employees to Babcock
The solution
Babcock has developed new and sustainable ways to deliver improved services and unlock the potential of every available asset. These have incorporated new working practices for staff, new training programmes, and the implementation of robust industry software tailored to the needs of the contract that enables better monitoring of assets to enhance
decision-making and security.
To meet the contract challenges, Babcock created integrated teams that drew on the collective experience of its own people, the customer’s existing team, and both British Airways and Babcock suppliers to meet the challenges of the contract. This flexible approach helped bring together more than 58 different suppliers working across 14 different countries. This included running 83 projects simultaneously to ensure programmes, such as new equipment for Heathrow Terminal 5, and the opening of the new Eastern Ancillary Area Workshop, were delivered on time.
The outcome
The advantages of Babcock’s drive to continually provide a high quality, resilient service has delivered the following outcomes:
• Maintained 99 percent critical availability
• Reduced the overall cost of the contract year on year by 16 percent
• Reduced workshops at Heathrow, saving in excess of £250,000
• 7 percent reduction in London Heathrow ramp fleet, 12 percent at Gatwick
• Introduced cutting edge fuel efficiencies
• Received the Diamond award from the BAA Clean Vehicles programme
Metropolitan Police Service
Babcock has developed bespoke sustainable solutions that combine new technology and best practice asset management to deliver improved fleet availability at a reduced cost for the Metropolitan Police Service (MPS).
The challenge
• Undertake fleet management of over 4,000 owned vehicles, 600 leased vehicles and 500 vehicles on hire using availability contracting principles
• Take ownership of two maintenance workshops, forward workshops and required staff
• Improve availability for a fleet that travels over 63 million miles a year
• Oversee the repair and maintenance for the fleet, and specialist equipment
• Respond 24/7 x 365 days a year to defects and communications problems to ensure minimal downtime
The solution
Babcock implemented our ALCAMiE approach to increase availability and optimise usage through more accurate maintenance schedules, work patterns, procedures and asset tracking. The tailored incident management software also supports detailed trend analysis that identifies potential efficiency improvements and pinpoints resource needs. Babcock also invested in two new innovative service and
a team, combining skills from both organisations to meet the requirements of the contract. Together with the 15 mobile maintenance response units, Babcock carries out over 500 hours of maintenance every day.
A dedicated customer relationship manager was also appointed to facilitate service delivery meetings, manage contract compliance and develop the contract year on year, including continual efficiencies and associated improvements.
The success of the partnership has recently seen Babcock win a new contract to manage the Metropolitan Police fleet of 2,500 bicycles.
The outcome
The advantages of Babcock’s drive to continually provide a high quality, resilient service has delivered the following outcomes:
• Maximised fleet availability across a diverse fleet of between 89-95 percent
• Reduced costs of collision repair due to the use of recycled parts in conjunction with MPS
• Works in partnership with the customer to reduce vehicle hire costs by a quarter
• Deliver a value-for-money service in a high demanding market
UK Headquarters
Babcock International Group Blue Fin Building
110 Southwark Street London
SE1 0TA
Tel: +44 (0) 207 969 0000
U.S. Headquarters
Babcock Support Services (USA) LLC 1954 Greenspring Drive, Suite 480 Timonium
MD 21093 USA
Tel: +1 410 847 3441
Babcock is based across the world; please contact one of the offices above to find your nearest office.
