Green Operations

Nestle Bolsters Fleet Value by Improving Processes and Leveraging Size

September 2009, Green Fleet Magazine - Feature

by Cheryl Knight - Also by this author

As one of the world's leading nutrition, health, and wellness company, Nestlé employs more than 280,000 people and has 456 factories situated in 84 countries. Its products are sold in almost every country across the globe.

And as a worldwide leader in product categories such as soluble coffee, infant nutrition, bottled water, condensed and evaporated milk, ice cream, chocolate and malt drinks, and culinary, Nestlé's sales force depends on its fleet of vehicles to reach existing and prospective clients.

Thanks to a strong partnership with its fleet management company, implementing cost-saving initiatives, and continually leveraging its size, Nestlé recently saved more than 300,000 gallons of fuel and reduced emissions by more than 15 percent, leading to an annual savings of $1.2 million.

Nestlé operates more than 5,000 vehicles in the U.S. and Canada, with worldwide numbers close to 29,000 units. The company structure features a mix of fleet managers and cross-functional responsibilities involving fleet. Typically, a Nestlé manager who watches over his or her operating company's fleet is also responsible for other areas such as facilities, finance, and human resources.

Operating companies include Dreyer's Grand Ice Cream, Nestlé USA, Nestlé Nutrition, and Nestlé Waters.

Diverse Worldwide Fleet Team Remains Proactive

Helping keep a handle on fleet policy and costs is Dean Yerem, purchasing manager for Nestlé Business Services - North America. He supports many fleet managers throughout the company to bring value to the fleet and those managers.

According to Yerem, this value primarily lies in processes, cost savings, and continually leveraging Nestlé's size. A recent example of Yerem's impact unfolded in 2008 with a change in Nestlé's selector list.

"Last year, with high gas prices and given the makeup of the fleet, we decided to take measures to continue to provide our sales force with a safe, comfortable, reliable vehicle while at the same time taking measures to reduce the cost of fuel and the overall capital cost," he said.

Yerem achieved these results by moving all vehicles on his selector list to four-cylinder models.

"By doing this, we were able to show some significant improvements in all these important factors," he said. "And at the same time, this allowed us to be proactive on a 'green' level and reduce CO2 emissions."

The fleet team has also reviewed different technologies involving mapping and productivity enhancements. In addition, they were able to gain wins internally by promoting eco-driving tips and utilizing quarterly newsletters to continually educate drivers on safe and fuel-efficient driving.

Nestlé Companies Make a Positive Environmental Impact

While many different operating companies within Nestlé use their own selector lists, the fleet primarily draws upon the Chevrolet Malibu and Impala, Buick Lucerne, Saturn VUE and Aura, and the Pontiac Vibe.

Liz Paton, director of Human Resources Corporate Initiatives for Nestlé Canada, manages 550 vehicles, including the Dodge Journey and Chevrolet Malibu and Uplander. Paton partners with Yerem on supplier negotiations and consolidation of services.

Paton, a 10-year fleet veteran, emphasized the decision to move to four-cylinder vehicles positively impacted her fleet.

"In 2009, the decision was taken to move from six-cylinder minivans to the more economical four-cylinder Dodge Journey (for sales reps and managers) and four-cylinder vehicles for all levels of selector vehicles," she said. "This was not only an economical option, but also an environmental initiative."

Nestlé Waters North America also remains proactive on the green front. The company has installed 32 GenDrive hydrogen fuel cells, purchased in 2008 from Latham, N.Y.-based Plug Power, to use at its Dallas bottling facility. With that move, Nestlé Waters has converted its entire fleet of sit-down counterbalanced lift trucks from internal combustion engines powered by liquid petroleum gas to Yale Class 1 electric lift trucks powered by GenDrive power units.

Nestlé Waters evaluated both hydrogen fuel cells and lead-acid batteries as potential replacements for its current fuel source. However, Plug Power's GenDrive technology allowed the company to make the full site conversion without incurring the heavy labor and equipment costs associated with buying, storing, maintaining, and changing batteries. With lower operational costs than the incumbent technologies, fuel cell systems also allow for increased worker productivity.

Pennsylvania-based Air Products has signed a long-term agreement with Nestlé Waters to supply hydrogen and hydrogen fueling station technology for the Dallas facility. The fueling infrastructure consists of an outdoor liquid hydrogen storage and compression system, as well as multiple indoor fuel dispensers for operator refueling. The GenDrive power units can be quickly refueled by the lift truck operator in less than five minutes, completely eliminating lead-acid batteries and the related charging and storing infrastructure.

Fleet Team Uses Strengths to Improve & Move Forward

Because the main vehicle function at Nestlé involves the company's sales force, fleet is an important tool for Nestlé's sales structure. Additionally, because sales and operations are the lifeblood of the organization, Yerem's primary goal is to ensure the sales force has the proper vehicles to get the job done effectively and efficiently.

"Nestlé has a long, rich tradition, and our fleet helps us maintain our goal of being the very best nutrition, health, and wellness company in the United States," Yerem said.

Utilizing the strengths of Nestlé's fleet allows management to continually improve operations and proactively look ahead to future initiatives, maximizing value.

"When we implemented the green initiative last year, everyone saw the value and where the company was going in regard to saving fuel, reducing emissions, and looking at our overall footprint," Yerem explained.

He also pointed out that Nestlé emphasizes maximum communication within its fleet operations, with online reporting, monthly floor meetings, and periodic newsletters that cover all aspects of the company.

"Fleet has played a part in that as well, as we publicize our successes and communicate new projects like safety program enhancements and becoming connected globally," Yerem said.

Nestlé's fleet team also strives for innovation and technical efficiencies. In fact, last year, a Nestlé operating company moved to online ordering, resulting in a significant improvement over the previous method.

"It saved the time of the driver, in addition to the administrative burden of the HR and fleet managers themselves," Yerem said. "Plus, we took great strides in putting compliance triggers in the process to enable managers to have approvals and visibility."

Yerem also pointed out that Nestlé's independent operating companies have the ability to act "as one" and share each other's experiences and best practices.

"It is almost like we can internally benchmark against ourselves," he said. "We have open communication lines, and with the sharing of each other's knowledge, we are continually improving."

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