Savings of over 9% achieved.
Central control of finances established
Invoices reduced from 20,000 per year down to 52
Invoice error rate reduced from 10% to 0%
Founded in 1984, Nightfreight is now the market leader in overnight delivery services, specializing in the delivery of 'irregular dimension and weight' freight. Operating a fleet in excess of a thousand vehicles, they employ over 2,200 staff at 52 depots around the UK.
Investing millions of pounds into customer service, operational developments and resources, and dominating what was once known as the 'Cinderella' sector of the market, Nightfreight are best known by their customers today for their successful home delivery services, tailored express solutions and dedicated contract logistics offerings. They are recognised in the industry for radically changing hub and depot procedures, streamlining the entire consignment handling process and being the first freight company to introduce a more flexible approach to pricing structures, related to the volume of freight, across a range of service offerings.
Nightfreight has more than 50 locations across the UK using 153 different agency suppliers for the provision of temporary agency staff. A lack of transparency of charge rates, resulting in rate inconsistencies, across a high annual agency spend created budgeting and central control difficulties. Nightfreight also experienced problems with varying terms of business, quality of workers, extended hire periods and payment terms. Specifically, Nightfreight reported little agency commitment and an absence of any 'partnership feeling'. A heavy administrative burden of 20,000 invoices per year was proving wasteful and costly.
de Poel's appeal
de Poel's ability to provide central control of costs and real-time management information appealed to Nightfreight as a means of increasing visibility and control of yearly spend, in turn, resulting in direct cost reduction. Nightfreight looked forward to seeing regional and local spend all in one place with a view to challenging and better managing that spend. Capacity to streamline the timesheets and 20,000 invoices associated with Nightfreight's employment of temporary agency labour was attractive as a way of helping Nightfreight to cut invoice-processing time and slash indirect costs. de Poel's expert knowledge of the recruitment market was seen as important in assisting Nightfreight to improve relationships with agency suppliers and bring in better quality admin workers, LGV drivers and warehouse operatives.
de Poel's specialist research team carried out an in-depth analysis of Nightfreight's 52 sites, looking at agency invoices and timesheets over a 13-week period. Key problems identified included a high spend and lack of relationship between the quality of supply and agency margins, alongside a typical error rate of 10% on invoice-processing and limited spend control.
de Poel advised introducing a managed 'panel' of agency suppliers (based on existing supply arrangements and Nightfreight's unique staffing requirements) working to formal terms of business to improve consistency and quality of supply. Alongside this, they suggested that a standard, optimum rate card be introduced to reduce costs whilst at the same time allowing Nightfreight to retain quality candidates. de Poel's unique, web-based electronic timesheet and processing system e-tips® was also recommended to ensure visibility and control of agency spend and more streamlined associated paperwork.
After the recommendations were approved, the scheme was trialed at six locations. Full roll-out followed shortly after, overseen by a dedicated Account Manager. de Poel's agency presentations and invitation to join the managed panel were met with a 90% positive response rate so that much of the current supply base was retained, the project was implemented with minimal disruption and concerns about depots losing relationships with agencies were quickly eradicated. Queries about agency rates were flagged and resolved easily, whilst managers were required to adapt to more rigorous recruitment and administration processes.
- Savings of over 9% on annual temporary agency labour spend were achieved.
- Central control of finances was established, with a new, clear picture of Nightfreight's multi-million pound agency spend reducing financial risks to the business.
- A standard rate card where margins reflect quality successfully removed agency over-charging and ensured suppliers competed on service rather than price.
- Invoices were reduced from 20,000 per year down to 52, the conversion of paper-based documents to electronic files saving 1 tree for every 5,000 invoices processed. Error rate on invoice processing reduced from 10-0%.
- Formal service level agreements with Key Performance Indicators helped Nightfreight establish consistency, mitigate legal exposure and improve the quality of their workers.
e-tips® and its reporting tools remain extremely valuable in allowing Nightfreight head office to monitor and control the spending activities and employment patterns at individual depots and regions, creating opportunities for better budgeting.
Dedicated Account Management service continues to be effective in providing support to Nightfreight. The Account Manager is regularly in touch, through quarterly review meetings, with key sponsors keeping them informed of developments and opportunities within the agency market.
de Poel's expertise in the recruitment industry is continually useful in generating further opportunities for cost savings and efficiencies.
The de Poel e-tips system has given us an invaluable management information tool that has taken away the mystique of managing agency relationships and has provided the business with a totally transparent process which must be in the interest of all parties.
"The de Poel process as a whole has enabled Nightfreight to control our temporary agency recruitment costs far more effectively than before and to manage our relationships with agency suppliers in a more holistic way than could be achieved from within our own resources on a national scale.
"As a company we have found de Poel very responsive to our needs. Their expertise in the agency supply market has been helpful in providing opportunities for further cost savings and efficiencies.