Linens Direct is a company that recognises the importance of managing its cost base, especially in the current economic climate. However, with a growing network of stores and a popular internet business to boot, its internal resources are fully committed to operating and growing the business.

This has left little time to focus on the kind of forensic, line-by-line scrutiny of expenditure required to generate significant savings or the market research needed to negotiate streamlined contracts with suppliers.

Karen Everson, Financial Controller, says: “I know that there are significant benefits to be achieved from a thorough review of costs and the impact clearly goes straight to the bottom line. But, despite the benefits, it’s just not feasible that we could find the time in-house to manage such a review; as the whole team already have demanding schedules.”

In business for over 18 years, Linens Direct sells a wide range of soft home furnishings through its network of 32 stores across the country as well as online.

The company’s solution to tackling its supplier costs has been to establish a partnership with cost, purchase and supplier management consultants, Expense Reduction Analysts, and during the four years the two companies have worked together on a number of different areas of expenditure to identify savings.

In many cases, these have been worth more than 30 per cent of the existing spend and have included stationery (where savings of 37 per cent were made), print (savings of 35 per cent), cash handling (savings of 31 per cent) and waste (savings of 29 per cent).

St John Rowntree, consultant at Expense Reduction Analysts, says: “Many of the savings we’ve achieved for Linens Direct have resulted not just from price negotiations, but from improved procurement and supply chain efficiencies that better suit the way the company operates.”

For example, over time stores in the chain had ended up with individual contracts for wastes services and these varied from private contractors to local authority collections, all with their own pricing structures and rates. Expense Reduction Analysts was able to streamline this important area of the company’s operations and put in place a centralised management system with a single point of contact to co-ordinate all charges and contracts.

Similarly, the contract for cash handling was reviewed and following a detailed review of processes and seasonal requirements, a rationalisation of cash collections was recommended resulting in savings of 41 per cent.

Mission Impossible: Should you choose to accept it?

Steve Jones contacted the network’s Property Team in April, 2011, to request their assistance in a review of    the rent and rates of a client, Rosewood Pet Products Limited, based in Shropshire. The company has grown rapidly in recent years to become a leading wholesaler of pet products to retailers and independent high street stores across the UK. Based at a freehold site in the village of Broseley, the business had acquired an overspill warehouse and distribution facility approximately three miles away at Halesfield in Telford some years ago to cater for a short term expansion. That short term expansion has now grown to ongoing requirement of approximately 43,000 sq ft and was a cornerstone of the current business growth. The brief was to agree a renewal of the lease on more competitive terms, if possible, from the leases’ expiration at the end of October 2011.

Steve Jones obtained the lease documents and identified that the leases were on an “all inclusive” rental including business rates, utilities and repairs. Net of business rates, the rent equated to £96,806 per annum, or £2.25 per sq. ft – not much to work with given the Property Team’s usual contingency fee basis. Nonetheless, the Property Team agreed to undertake a consultant day review with the client which includes a number of generic stages including reviewing company documentation, inspecting sites, conducting a market assessment and creating a recommendation report.

The review established that the business undertaken at Halesfield had grown very rapidly through winning key large accounts with major retailers. This led to an expansion at the Halesfield site on a “bay by bay” basis on separate but flexible lease terms with no security of tenure. The lack of security of tenure meant that Rosewood had no automatic right to a new lease or any right of independent redress in the event that the landlord would not agree acceptable terms at renewal.

Whilst this lease flexibility suited the business in its early expansion phase, clearly having no security of tenure on a large warehousing operation presented a potential business risk in future. Furthermore, the scale of the operation was such that it may be problematic to relocate it before the lease expiry if the terms are not agreeable with the landlord.

Property consultant, Andrew Pegg, MRICS, said “This is a very good example of a dynamic and successful business doing its “core” business very well. However, because it didn’t have the benefit of on-going property advice, the rapid growth had meant that their ‘eye was not on the ball’ with regard to the implications of the present evolved lease structure. Fortunately, Steve Jones was able to spot the potential problems for the client as a result of his attendance at Property Team training sessions, and flagged it with ourselves and the client accordingly”.

Fortunately, Mark Bollands, Financial Director at Rosewood had provided a thorough initial briefing as to what the business required in terms of alternative space. This included dock loading, location of the premises and also a desire to relocate both parts of the business to a single site in the future. This enabled the Property Team to undertake a thorough and informed review of the market for alternative space to benchmark both current costing and alternative likely lease terms.

The market review identified of a number of properties which could be suitable for the Rosewood both on a straight replacement and consolidation basis. As external advisers, the team were able to provide an independent and objective view of the local market options whereas all the local agents were conflicted in form by offering space on behalf of their landlord clients.

Pegg commented “It was quite interesting to see that when it came down to negotiations on specific properties, the professional landlord made sure that he was present on site, to both meet our client and to ensure that his interests were represented, knowing his agent had other clients’ properties he was also promoting”.

Initial negotiations were carried out with potential suppliers and by the end of May 2011, the Property Team were able to report; two sites were identified which could accommodate Rosewood as a whole for less than the current cost.

Speaking of this wider opportunity, Mark Bollands, Financial Directors, Rosewood Pet Products Ltd, said “It was very interesting to see what was available in the market place at very competitive rates, the expert knowledge provided by Expense Reduction Analysts opened our eyes to both short term gains within our current location but also the future opportunities for the business”.

This review provided a basis for constructive negotiations to take place with the current landlords. Unsurprisingly, the landlords were expecting to agree a short term renewal at a higher rent being paid. However, with Expense Reduction Analysts leading the negotiations, it enabled discussions about securing the longer term requirements of the business with the flexibility to vacate to a single site in the medium term if required.

Ultimately, the business decision was to remain with the current premises but to have the flexibility to move out within the next three to five years. The outcome achieved by the end of July 2011 was renewal terms agreed on a 5 years basis with a Tenant-only option to break the lease at the end of the 3rd year. Furthermore, a revised rent was agreed of £1.90 per sq ft (£0.30 per sq ft saving or £15,068 per annum), making a useful saving of over £45,000 for the duration of the lease term up to the break option alone.

The Property Team also secured the ability for Rosewood to take further expansion space within the Halesfield unit at the new pre-agreed rate, thereby ensuring cost certainty as well as the ability to expand or contract as required. Moreover, it ensured business continuity during a critical phase and allowed the senior management team to focus on their “day job” throughout the negotiations, with the exception of 2 or 3 site visits and on-line reporting.

Pegg added, “In other circumstance, it is not uncommon for potential clients to consider that this level of spend not to be sufficient to get an expert in, or to undertake the negotiations themselves. Fortunately, in this instance the client trusted us to get on with it and as a result they were able to make a robust decision to stay on terms they were happy with as well as delivering useful cost savings.”

Commenting on the advice received, Mark Bollands, Rosewood, said “We managed to improve the offering we had with our landlord which was as a direct result of the advice we received, in short the advice saves us a considerable sum of money over the coming years.”

The business is now looking forward to its further expansion with the benefit of secure base for its core business together with new ideas on its options provided by the ERA property team.

The outcome achieved by the end of July 2011 was renewal terms agreed on a 5 years basis with a Tenant-only option to break the lease at the end of the 3rd year. Furthermore, a revised rent was agreed of £1.90 per sq ft (£0.30 per sq ft saving or £15,068 per annum), making a useful saving of over £45,000 for the duration of the lease term up to the break option alone.

The network of twenty-plus Kiddi Caru day nurseries in central and southern England is part of The  Childcare Corporation, a company founded upon wholly ethical principles to promote quality nursery provision.

John Loveless of Expense Reduction Analysts takes up the story of the partnership between his company and Kiddi  Caru: “At my first meeting with Adrian Moore in 2008, he identified food purchasing as a significant cost area, and one  that could benefit from some detailed analysis. I was fortunate to be able to call upon the expertise of my colleague,  Andy MacDonald, to undertake this work.”

Andy MacDonald continues: “Kiddi Caru has around 20 nurseries, so I analysed a selection of invoices from settings of various sizes, comparing and contrasting food purchasing levels, unit prices and costs per head, and I presented my findings to Adrian.”

Adrian Moore remembers that meeting: “I had known that there were some inconsistencies in the way in which we purchased, and probably some opportunities to leverage economies of scale. But what Andy and John reported made me realise that this review was something that offered a platform from which to launch a whole new methodology of food procurement.”

£77,500 savings on food – and a more nutritious menu

Andy MacDonald again: “Instead of each nursery concocting it’s own menu and buying food in a random, unconsolidated way, Adrian saw that, if we could develop a menu that every nursery would be happy to follow, find a supplier who could deliver every item, and then ensure that the nurseries continued to adhere to this core menu, the potential savings were immense.

“But that was not all. When we talked to the potential suppliers, we asked them to help Kiddi Caru to achieve their nutritional goals as well as their financial ones. Understanding the value of this to all parties, the suppliers offered the services of an educational nutritionist as part of the deal. Kiddi Caru assumed they would have to pay for such advice, so they were very impressed that we were able to source it free of charge.”

The supplier was chosen, the menus were devised and the nurseries started to buy their food from the one source. This resulted in £77,500 worth of savings on an annual food bill of £365,000. In addition, of course, the company now enjoys complete control over its food purchasing, as well as reduced administration in dealing with only one supplier. And perhaps most importantly, The Childcare Corporation is confident that the nutrition that it offers its children is of the highest standard – something that they are not afraid to highlight in their marketing material.

Adrian Moore sums up the value of Expense Reduction Analysts to his company: “The nursery marketplace is getting more and more competitive, and, with many families’ budgets under pressure, we have to ensure that we provide a premium service at a rate that is affordable for our customers but also profitable for us. Expense Reduction Analysts have helped us on all aspects of this strategy: the cost reduction that they have delivered means that we have more profit to invest back into the business; their supplier consolidation reduces our admin; their ongoing reporting ensures that we retain control; and the enhanced nutrition that they have sourced for us has provided us with a huge differentiator in our marketplace. I am delighted with John and Andy’s input and I have already asked Expense Reduction Analysts to look at our energy and water expenditure.”

“Expense Reduction Analysts have transformed our food purchasing and our food provision. Not only are we now able to control our expenditure and generate significant savings in this area, but we are also able to offer our children an even more nutritious and balanced diet. We feel that this aspect of our care is so important that we now highlight it in our marketing.” Adrian Moore, Finance Director, The Childcare Corporation.

Formed in 1968, The Wessex Autistic Society is a leading voluntary organisation delivering education, support and care  services for people on the autistic spectrum. The society, which is part of the National Autistic Society, operates  services in Dorset, Hampshire and Somerset, and outreach to anyone else who may need them, regardless of where they  may be.

The Wessex Autistic Society originally engaged Expense Reduction Analysts in September 2008. Kevin Medcraft describes his first impression: “I immediately recognised that they could make a huge difference to our procurement. We are a relatively small organisation, and we simply do not have the resources to analyse every contract and survey every corner of the market, to ensure that our expenditure is as keen as possible. I asked Danny Rogers to begin the relationship between our two organisations by analysing our spend on Office Stationery.”

Danny Rogers of Expense Reduction Analysts continues: “I saw straightaway that The Wessex Autistic Society were buying items from a disparate range of suppliers – this included arts and crafts materials for their school, as well as the more traditional office stationery. I was able to rationalise their purchasing by drawing up a core list of products, and I am happy to say that, since then, The Wessex Autistic Society have been extremely disciplined in keeping to that list and the level of their expenditure has benefited accordingly.”

Consolidating contracts to secure savings

In the light of this success, Kevin Medcraft asked Danny Rogers to look at Utilities and Postage/Franking as well. “The Utilities category was certainly more complex,” says Danny Rogers. “The Society had many different contracts – all with different renewal dates – which made them difficult to manage, as well as offering no economies of scale upon which to negotiate.”

The contracts took more than a year to consolidate, but, by the time of the final alignment in August 2010, the exercise produced the extremely positive result of over £100,000 worth of savings. Wessex also enjoy the additional benefit of being able to manage for themselves the two resultant contracts – one for electricity and one for gas.

Huge savings and far better service

Danny Rogers’s analysis of the Society’s spend on Postage and Franking produced a correspondingly pleasing result, as he says, “Wessex had signed a five-year contract lease on a franking machine, with fairly onerous monthly payments. On analysing their needs, I soon concluded that they would be far better off buying one outright. In fact, the break-even point arrived within a year, resulting in another significant saving.”

Kevin Medcraft sums up the value of Expense Reduction Analysts to his organisation: “The savings that Danny and his team have achieved have been amazing. But, more than this, they have made sure that the service that we receive from suppliers is not compromised. Quite the reverse in fact in the case of Stationery, for example, they recommended a new supplier, who has proved to be outstanding, so we enjoy huge savings and far better service! I have already asked Danny to extend his remit and look at our Marketing Print spend as well.”

Bob Lowndes, Chief Executive of Wessex Autistic Society, concludes: “I cannot praise Expense Reduction Analysts highly enough. They have made sure that the precious funds that we receive from the Local Authority and our fundraising activities are spent as wisely as possible to benefit people with autism in our region.”

First ‘rate’ service delivers cost savings for European Furniture Group

As the leading supplier of office workstations, desks, chairs and  wall screens, European Furniture Group’s (EFG) focus  has been on making  the working environment comfortable and efficient for a number of  organisations throughout  Europe. But EFG recently realised it needed to  address the financial comfort of a company much closer to home: itself.

Since changing its name from NKR in 1993, EFG has grown to become one of  the largest manufacturers of office  furniture in Europe, with subsidiaries in  Sweden, Norway, Denmark, Finland, Great Britain and France. In the UK,  EFG  Office Furniture supplies to both commercial projects and government  offices and has built a strong reputation for  being one of the  country’s leading manufacturers.

Reviewing existing processes

Despite EFG’s proven success, the company felt that reviewing its own day-to-  day processes and assessing it’s commercial partnerships – developed and managed at  the  company’s 3 warehouse and office buildings – could result in certain expenditure  levels being reduced.

EFG engaged the services of cost, purchase and supplier management consultants,  Expense Reduction Analysts in March 2008. Almost immediately, Expense Reduction  Analysts consultants Tony Smith and Paul Giness implemented a cost management  exercise for EFG, beginning with a comprehensive audit of the company’s business rates.

Craig Howarth, Managing Director, says: “EFG is a geographically diverse organisation, with national coverage across current premises in London, Warrington and Glasgow. We wanted to ensure that we were paying the correct business rates across all our sites, and, if we felt there were grounds for appeal, contact the Valuation Office Agency (VOA).”

Giness explains: “Most people are aware that business rates are the way in which businesses contribute towards the cost of local services like the police, fire and rescue services. What is less well-known is that there are grounds on which these rates can be challenged.

“The VOA – the agency responsible for business rates – produces ratings lists which include the rateable values of domestic and commercial properties. They are based on a five-yearly review cycle, but are calculated on the VOA’s estimate of a property’s rental value. As with all estimates, however, the end figures might be either too high or too low and can be challenged.”

Cost saving measures

EFG forwarded a copy of the local authority rate demands to Expense Reduction Analysts for review. The team began by conducting a site appraisal of EFG’s premises at St Helens, Reading and Warrington. This would prove to be a highly useful – and ultimately financially rewarding – process for EFG, with each site uncovering a different set of criterion which would ultimately deliver cost saving opportunities.

The team at Expense Reduction Analysts began their audit by measuring the ground space at EFG’s Warrington head office facility in order to ascertain the size of the property. Aware that the VOA measures all properties using Royal Institution of Chartered Surveyors-approved standards to calculate rateable value, Expense Reduction Analysts’ measurement did not correspond with the one used by the VOA.

Craig Howarth says: “Expense Reduction Analysts’ informed us that there are grounds on which business rates can be challenged, with an appeals process being available to businesses which believe their buildings have been overvalued. Despite the law governing rating challenges being complex, Expense Reduction Analysts’ worked closely with us to lodge an appeal with the VOA regarding this apparent measurement error, an appeal that ultimately delivered a £10,000 rebate.”

In addition to assessing the buildings’ accessibility, car parking facilities and ceiling height – all of which can have an impact on the rateable value of a property – Expense Reduction Analysts’ team of experts was able to generate a further £6,000 saving at EFG’s offices in Reading due to the decision taken by EFG in 2005 to merge its ground and first floor functions.

Giness explains: “Changes to the physical state of a commercial building can render its rateable value inaccurate. Prior to the merger, EFG’s charges had been based on there being two floors. While the merger had delivered EFG benefits in economies of scale, it was unaware that economies of scale – calculated on rate per metre basis – were securable on larger floor spaces.”

Neighbourhood watch

Meanwhile in St Helens it was, according to Giness, very much a case of EFG “keeping up with the Jones’s”. He says: “The rateable value of a commercial property is based on a professional assessment of the annual rent of a property if it was available to let on the open market at a fixed valuation date. In St Helens we conducted an analysis project to ascertain the rates that were being paid by neighbouring properties as these were almost identical to EFG’s. Having secured this information, we were able to lodge an appeal with the VOA and successfully negotiate a £20,000 rebate for EFG.”

Giness concludes: “In the current economic climate, it’s essential that businesses, whatever the size, check the proposed rates and seek professional advice where they feel there may be grounds to appeal. Many SMEs operate on relatively small profit margins, and making sure the business rate bill is correct could make a big difference.”

Howarth agrees: “Business rates are a necessary – but costly – overhead for occupiers of property. Understanding the key issues and knowing how to control them is fundamental to good financial management and can deliver considerable efficiencies.

Ask the experts

“The issue is complex, especially given regional variations and changes in the law. My advice would be to enlist the services of companies which truly understand the subject. By doing exactly this, we have been able to save more than £35,000 alone – a significant amount of money by anybody’s standards.”

Based on the success of the business rates audit, EFG has invited Expense Reduction Analysts’ to seek other potential opportunities by reviewing expenditure levels across a number of different cost categories, including the latest business rates revaluation in 2010, Office Stationery, Energy Supplies and Environmental Waste.

Howarth adds: “Finding similar savings may turn out to be a challenge for Expense Reduction Analysts’ as they’ve set the bar so high.”

Wharfedale has been part of the IAG Group Ltd. since 1996. Always at the forefront of loudspeaker design, from its conception in 1932 by Gilbert Briggs, Wharfedale is one of the most creative and innovative companies in the market. Pioneering products such as the Diamond series, which first defined the market for bookshelf speakers and are now regarded as ‘classic’ designs, were firsts of their kind.

Continuing this tradition, IAG has invested in and developed new manufacturing processes and technologies, and an innovative building process that has enabled them to produce high quality materials for a fraction of the cost.

Paul Wheatley of Expense Reduction Analysts reviews the partnership between his company and Wharfedale: “Looking back, it is the courier project that stands out in my mind. It certainly had its twists and turns. But, going back to the beginning, when we first got the go-ahead from Tim Harris to look at this area, I was fortunate to be able to call upon the expertise of my colleague, Steve Parrott, to analyse the spend.”

Steve Parrott comments: “The initial project followed the normal pattern. After looking in detail at their expenditure in this area, we were able to recommend various changes which resulted in a very satisfactory 19% saving. As is the norm, we then undertook our two years’ monitoring service, to ensure that these savings were realised across that period.

“What I found was very significant”

“At the end of that period, Tim Harris took the decision not to opt for our ongoing service, and in all honesty, you can see the logic behind this. The incumbent supplier had retained the business so had been known to Wharfedale for many years; the tariffs were set. On the face of it, there was nothing that necessitated month-by-month analysis.”

Paul Wheatley continued to manage the account’s other requirements, and fifteen months after Expense Reduction Analysts had ceased the routine monitoring, in the course of a general discussion, he suggested to Tim Harris that things had changed sufficiently in the courier market – suppliers had merged, services had been enhanced – that it might be worth Wharfedale’s while for Steve Parrott to review their courier costs again on a contingency basis.

Steve Parrott describes the result: “What I found was very significant. Not too long after we finished our two-year monitoring, the supplier started to edge his prices up – changing the basis of volumetric weight calculations, increasing fuel and other surcharges, and increasing the per kilo rate – to the extent that they had eventually clawed back between 16 and 17% of the 19% saving we had originally identified. And the only notification that Wharfedale got of any of these changes was in very small print on the last page of an 8-9 page invoice.”

“It is only something that a regular, detailed review could have noticed.”

Tim Harris comments: “I was naturally surprised by what Paul and Steve showed me. That is when I realised the true value of their service. To be fair to my guys, there is no way in the world that we could have devoted sufficient time and effort to recognise that these prices were creeping back up. It is only something that a regular, detailed review could have noticed.”

Steve Parrott then went on to analyse the market on Wharfedale’s behalf, recommending changes implemented in the summer of 2011, which will realise 36% savings. The significantly better savings, delivered through an alternative supplier, reflect the many changes that had taken place in the supplier market. These changes prompted the recommendation on this occasion to switch suppliers to one whose service profile better matched Wharfedale’s needs.

Tim Harris summarises the value of Expense Reduction Analysts’ service to his business: “I cannot recommend Paul and Steve and the service that their company delivers, highly enough. They do something which no business – certainly no business of our size – could do. They find savings, and they make sure that those savings are realised for as long as one asks them to do so.”

SQS Group Ltd is Europe’s largest Testing and Quality Management Consultancy with its Head office in Germany. Its UK base is in the heart of the City of London with a back office training, finance and admin support function in Woking, Surrey.

The company leased 6,200 sq ft over two floors in Albion House, Woking which has been earmarked for inclusion in the town centre redevelopment scheme. The scheme is on hold in the present economic climate and therefore the developer landlord approached the client in April 2010 for a short-term renewal of the lease, reducing the rent from £17 per sq ft to £15 per sq ft from February 2011.

Already having a strong relationship with Paul Pearse from Expense Reduction Analysts, SQS appointed the property team in September 2010 to evaluate the landlord’s proposal and in particular to advise on whether to stay in the building or to relocate beyond the redevelopment area in order to secure better terms and avoid future disruption.

The property team undertook a thorough review of the lease and associated documentation to ascertain the client’s basis of occupation. In particular, one floor had been sub-let and the sub-lease was due to expire at the same time – and the sub-tenant was vacating, creating a possible dilapidations liability to assess.

The landlord offered a rent of £15 per sq ft; Expense Reduction Analysts achieved £7.50 per sq ft.

Furthermore, with the business having been in occupation for a number of years with the protection of the Landlord & Tenant Act (“the Act”), it could be entitled to circa £45,000 compensation in the event of the building being redeveloped. The “sting in the tail” however was that, if the client wanted to use provisions of the Act to secure a new lease, then it would have to apply for a new lease on both floors – including the one previously sublet and becoming empty, thereby doubling the client’s property costs.

Following a discrete review of alternative options in the market, to avoid alerting local agents one of whom was working for the landlord, inspections of a number of properties were made and competitive proposals negotiated on two possible alternatives. This enabled the property team to report on the comparative cost and suitability of alternative space and to benchmark the landlord’s offer. The preference was to stay to avoid immediate disruption to the business, particularly if a slightly longer guaranteed lease term could be secured.

Working closely with the client’s property lawyer, Expense Reduction Analysts were able to advise the client on a route not invoking the Act to secure better terms, but to rely on our relationship and negotiation skills to position the client’s situation effectively.

The client agreed in November 2010 and negotiations commenced in December and continued into the New Year. With robust, costed options available, we were able to satisfy the client’s needs in terms of lease length and to reduce the rent from £15 per sq ft to £10 per sq ft, with 6 months’ rent free period spread over two years. This has reduced the rental cost of the first two years to £7.50 per sq ft.

“As always, the service was professional, helpful, clear and concise”

Significantly, the property team were able both to ensure that the new lease is within the security of tenure provisions of the Act, keeping both security of tenure and the possible future compensation and to ensure that the new lease covers only the floor occupied and not the floor becoming vacant. The overall cost savings were circa £190,000 for 2011/12 alone on a worstcase basis, but it should be noted that the cost and disruption caused by relocating was also avoided. Other cost benefits secured included capping the service charge, simplifying the car park charges and ensuring that the basement store is retained on a rent-free basis.

SQS Facilities Manager Julie Wells comments, “I cannot thank the Expense Reduction Analysts Property team enough for their professionalism and care with this project. They have been a pleasure to work with and, once again, have saved our organisation a considerable amount of money and time. As always, the service was professional, expert, helpful, clear and concise.”

Commenting on the terms agreed/ aspect of Expense Reduction Analysts’ advice and service UK MD Stephen Fice said;

“Not only did Expense Reduction Analysts help in the negotiation process but used their considerable property expertise, to give SQS the appropriate guidance to ensure that the contract was such that it maximised on all the legally available benefits for SQS as a long standing tenant.”

Expense Reduction Analysts Property team is now at work addressing the dilapidations claims in respect of the vacated floor with both the landlord and former sub-tenant, and good progress is being made.

A copy of this case study can be downloaded by clicking here

In August 2009 the RAD initiated a spending review to validate budgeted expenditure for the coming year and contacted Neill Summerfield of Expense Reduction Analysts to help the RAD to obtain best market value to reduce the impact on the organisation of rising costs and falling incomes expected from the global recession. Importantly the decision to engage Neill Summerfield and his team of cost management consultants was supported by the Executive Management Board and the Board of Trustees. Progress in findingsustainable extra profits for the RAD is reported to both teams on a monthly basis.

“We would recommend to other charitable organisations that they meet with Expense Reduction Analysts to explore the opportunity to find extra significant and sustainable savings.”

“We have to date engaged Expense Reduction Analysts on ten categories of expenditure with travel and hotels our next target for review as this forms a large part of our spend. Our experience to date of working with Expense Reduction Analysts has been excellent. Each consultant has been professional and very thorough in their reporting and recommendations” said Richard Slatford, Financial Controller.

“Apart from the financial rewards of reducing expenditure, our work with Neill Summerfield and his team in securing service level agreements and key performance indicators from suppliers has encouraged people within the Academy to be more focused on working pro-actively to ensure that we receive the best possible service from our supplier base” “We would recommend to other charitable organisations that they meet with Expense Reduction Analysts to explore the opportunity to find extra significant and sustainable savings.”

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http://www.blmforum.net/en/blm/headline/1237/Neill-saves-Royal-Academy-of-Dance-over-%C2%A31m–Home-rest.htm

As the leading brand in the spray paint market, PlastiKote offers a portfolio of high quality spray paint products for a range of interior and exterior decorating applications. Since its inception in 1992, PlastiKote has grown and is now a wholly owned subsidiary of The Valspar Corporation, one of the largest global coatings manufacturers in the world. PlastiKote is continuing to expand in Europe and now has a presence in the UK, Ireland, Germany, France, Denmark, Sweden, Finland, Malta and Switzerland.

John Waine of Expense Reduction Analysts describes his original meeting with Joanne Garner, Site and Finance Manager at PlastiKote: “We discussed the business’s procurement and Joanne naturally wanted to ensure that PlastiKote was purchasing services as keenly as possible, especially in the critical area of logistics.”

“PlastiKote in the UK acts as a distribution hub, receiving product from the US, repackaging it and sending it on to retailers in this country and throughout Europe. In this regard, I was fortunate to be able to call upon the expert services of Expense Reduction Analysts’ Logistics Specialist, Fergus Smith.”

Fergus Smith takes up the story: “We started by analysing all of their distribution activities. Although there were some areas where they were obviously achieving good value, we identified three key areas that were worth investigating. A phased approach was agreed, starting with their inbound sea freight.”

“PlastiKote told me that they sat down with their freight supplier every six months to ensure that they were getting the best possible deal. They were therefore justifiably sceptical that we could find any further savings, so they were delighted with the 18.3% that we eventually achieved for them.”

Having product on their retailers’ shelves is imperative

“We quickly moved on to their outbound UK pallet requirement. In PlastiKote’s business, having their product on their retailers’ shelves is imperative; indeed, it is a vital part of their consumer marketing. We were able to find a much more local distribution company than the incumbent to fulfil their needs. The company had the infrastructure to handle both the smaller deliveries and the critical, time-sensitive, larger deliveries into the major multiples. This organisation interacted with PlastiKote very professionally from the outset, creating confidence in their abilities. And their performance ever since has certainly justified that trust.”

The third project looked at PlastiKote’s pan-European distribution, in particular to Germany and Switzerland. Different challenges emerged here. Fergus Smith explains: “Germany is a critical growth area for PlastiKote and their major customer there operates to a very stringent order cycle. This results in short delivery times from the UK to a very exacting two-hour delivery window to their customer’s distribution centres across Germany.”

“In delivering to Switzerland, as a non-EU country, the difficulty centres on dealing with the necessary import and export documentation. Again, we researched the market and recommended a supplier who was expert in fulfilling demand in the face of these obstacles.”

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