Improving performance through radical change.
Collinson Grant helped managers to restructure the business and improve results.
Founded in 1981, Northgate plc has grown organically and by acquisition to reach the FTSE 250. With more than 60,000 vehicles for hire, and depots all over the country, it commands the market. The directors asked us to help change the structure; to cut costs; and to boost profitability. We had 12 months to transform its business model and merge twenty regional companies into one centralised structure with a new IT system.
The regional managers had been allowed to run their businesses as they saw fit. There was now to be one combined effort to market one brand – One Northgate – with one set of processes and one operating system, to create efficiency. We helped the managers to set up and plan ten co-ordinated work streams. Some were to tackle CRM and pricing. Others were to redesign the organisation; to centralise administration and financial shared services; to get better results from the workshops; and to optimise logistics. And it was vital to set up measures of performance and accounting controls; to manage the roll-out of ERP; and to provide interim management in HR. All this allowed the company:
- to make each part of the business accountable for its contribution to profit. Commercial deals with the customer and is responsible for volume and price. Operations is a cost centre. Workshops have to meet set times and standards. Logistics are measured against use of fuel and type of journey
- to raise the performance of workshops and logistics through better planning and controls to measure their results
- to improve the overall efficiency of the hire process
- to spur efficiency by merging all financial transactions in a shared service centre
- to make HR policies and procedures fit the plan for One Northgate.
The business is now built on four ‘pillars’:
- Commercial looks after the size, pricing, and use of the fleet, and contact with the customer
- Operations runs the hire desks and workshops
- to prepare the vehicle and deliver it to the customer
- to repair and service vehicles efficiently and fast
- to receive returning vehicles and take them off hire
- Asset management buys and sells vehicles and manages assets on one balance sheet
- Support functions provide efficient administration.
The programme cut operating costs significantly, sharpened the response to customers, and raised profit.