Significant savings and process improvements for H&T Group
H&T is the country’s leading pawnbroking company with over 180 H&T outlets throughout the UK offering a range of services including pawnbroking, second-hand jewellery sales, cheque cashing, payday advances and unsecured loans. H&T Group aims to provide flexible finance options to customers who prefer to deal in cash, enabling customers to manage their finances in a simple and affordable way.
Alex Maby, Group Finance Director, H&T Group, wanted to explore effective procurement to ensure best value was being achieved. Following a meeting with Paul Davidson and Nigel Burnip of ERA, Alex felt the offering was a ‘win-win’ arrangement and subsequently engaged a team of ERA’s specialist procurement advisors to review a range of expenditure categories.
Tom Cooper, has over 21 years experience in telecoms and was enlisted to assist H&T in reducing costs and finding a supplier that could be more reactive to their needs.
Tom advised H&T on the best time to end the contract with their supplier, preventing an automatic rollover and gaining a substantial credit payment. The client then received a proposal for a 24-month contract (with 90-days required notice from H&T) with a potential supplier. These combined factors reduced the category expenditure by 20%.
Tom felt this figure could be further improved and presented a selection of suppliers that could provide an arrangement suited to H&T’s needs. A supplier was selected offering a contract of 12 months with 30 days notice required, which was of real benefit as H&T had embarked on changes in their property estate. This achieved a further saving of 27%, bringing the total savings available to 47% as well as improved supplier services. Peter Randall, expert in chemicals and gases with over 36 years experience in pharmaceuticals, and Peter Lee were appointed to review H&T’s arrangements for promotional printed balloons and gases used in many stores. The consultants produced a detailed review and sourced a supplier that could provide the same quality of balloons for a lower price. In addition, they identified a new supplier to fulfil requirements for helium and deliver the supplies straight to H&T’s stores.
Sue Cooke, expert in office supplies, was brought on to evaluate this category. Previously, H&T’s Head Office was acting as a purchasing function for all of the stores which was taking up valuable time and resource, but was providing head office with the ordering control they wanted. Sue’s aim was to implement an easier and more efficient procurement system that would allow the same level of control without taking the time and effort of head office staff. Sue ran a detailed review of the client’s requirements and created specific supplier service criteria.
Sue was in search of a supplier that could provide an online ordering system, making each store accountable for their own orders rather than going through head office.
Sue sourced a supplier offering a saving of 22.2%, an online ordering system and nationwide next day delivery directly to all of H&T’s stores.
An added benefit for the client is streamlined invoicing; all of the different site’s invoices are consolidated and given monthly to H&T’s head office which saves time and is easier to process. Nigel enlisted Keith Copestake who has over 25 years experience in the office products and print category to improve H&T’s process for ordering business print materials.
Keith identified that the new supplier for office supplies could meet the client’s needs for business print, allowing them to use the online ordering system. As well as being a convenient and more practical way of ordering, this has completely alleviated any distribution costs as the supplier is already making deliveries to the various stores. The supplier invoices upon usage of printed items which gives H&T a better use of their working capital as they don’t have to pay upfront for their business print.
In the marketing print category, H&T’s promotional materials and exhibition equipment were being ordered from two different suppliers; Keith transferred this to the same supplier for office supplies and business print, streamlining the process and making it much easier to manage.
Nadim Vanderman, who joined ERA in 1998 and has successfully completed over 60 postage projects, was enlisted to review mailing arrangements throughout the 200 sites and head office.
Throughout H&T’s 200 stores and GoldBars, Nadim suggested using Royal Mail’s latest online technology to distribute letters. This service allows staff members to log in and specify their mailing requirements for each month. Nadim trialled the system in one area before carrying out an extensive training programme amongst H&T’s staff. For ease of use, Nadim set up online templates for staff to alter to reflect their mailing requirements. In addition to the improved online system, staff were advised to manually take the mail to the nearest Post Office to avoid a collection charge.
In the electricity category, H&T chose to engage ERA’s service on a 12 month consultancy basis as they were receiving a fair market price for their electricity, but still felt that Nadim’s category expertise would be of great value. Although there was no unit cost saving, Nadim was able to make considerable improvements by working with the electricity supplier to align all of H&T’s contract end dates so each store’s contract didn’t have to be renewed individually.
ERA negotiated the free installation of SMART meters across all sites. These contain an individual SIM card that sends automatic meter readings to the supplier, providing accurate invoicing, removing the hassle of manually taking readings and allows H&T to manage their electricity consumption.
ERA consultant, Ian Morrison with over 30 years experience in facilities management was appointed to review H&T’s arrangements for cleaning and janitorial. Staff had been managing the purchase of these items by store causing a wide variant on the amount being spent between the individual sites, and taking time and resource of staff. It was also not ideal because products of a chemical nature can be dangerous when used incorrectly.
Ian explored the client’s usage and product specifications and found that the new supplier for the office supplies and print could also fulfil the client’s needs for janitorial items. All products now come with usage instructions ensuring full compliance with Health and Safety regulations.
Each of H&T’s sites has different safety requirements including smoke alarms, fire extinguishers and security alarms. Ian assessed a number of installations, compared these to the security supplies market and advised on a suitable typical security solution. Ian then worked with the existing supplier to configure the contract, adding requirements that were not previously being included. Ian used his extensive industry knowledge to negotiate with the supplier to achieve a lower price with an improved service.
SUMMARY OF SAVINGS
- Communications – Landlines: 35.6%
- Merchandising – Gas & Balloons: 28.8%
- Office Supplies: 22.2%
- Print – Business: 44%
- Print – Marketing: 41.8%
- Postage: 23.1%
- Facilities – Fire & Security: 19.44%
- Consumables – Janitorial: 30.6%
- Insurance: 15.4%
- Smart Meters:
Annual saving of £27,500
“The value that the consultants brought to our company goes far beyond the cost savings they achieved. In particular, we felt that Keith and Sue actually became part of our team as opposed to simply acting on behalf of us. In categories where we encountered issues, they took the hassle away from us, working hard to resolve any issues behind the scenes. The level of detail the consultants provided was astounding and they were fantastic at keeping suppliers accountable.”