 |
In the case study outlined below, you will see a customer of our unique program that has experienced a real and measurable difference in the way they conduct business. Actual cost savings include:
• A 10 percent savings on office supplies and business products
• A 14 percent savings on printed materials and business forms
• A 21 percent savings on logo merchandise
• A virtual elimination of on-site and unnecessary inventory of all of the above
• A reduction of 43 vendors to one and approximately 250 invoices per month (and purchase orders) to one single statement billing – with detailed information and analysis by branch and cost center. If you estimate that the average purchase order costs $50 to place and process, this would equate to approximately $15,000 per year of savings.
By forming a strategic partnership with open communication and trust, measurable savings resulted that ultimately increased the bottom line and Return On Investment.
The banking industry has gone through many changes in the past several decades. Deregulation has created an environment that has fostered many mergers and acquisitions and at the same time provided opportunity for a large number of new banks to arise. With these changes, we have witnessed the birth of number of regional banks with very aggressive growth.
A large regional bank in the Midwest had experienced this type of aggressive growth and was having considerable success in this changing marketplace. However, with the growth came a lack of control in a number of areas. They experienced decentralized purchasing for a variety of everyday expense items, resulting in a lack of consistency and no purchasing power leverage. They were buying printed materials on a branch by branch basis and lacked a central point for controlling the look of these items and had no means of inventorying them. They were lacking standards for a number if items that had some serious implications for the way their bank was running. With their rapid growth and tremendous success, they had not had the time to watch over the “little things”, which in the end added up to big things. More importantly, even though these things were important, they wanted to continue to focus on the big things – their banking customers. Initial conversations began with how Concentric Sourcing could help them achieve their objectives in this area; consolidating vendors, reducing costs, improving branding, and streamlining everyday workflow.
The headquarters staff at the bank endorsed the overall concept and the Concentric Sourcing team went out to the field and met with the Branch Manager and Office Manager for each location. They conducted the Discovery Phase of the due diligence – analyzing what items were purchased – where, how, price paid, the quantities that were used, and what issues existed. This critical data provided a hard look at what potential existed with implementing a centralized procurement portal for the bank to maximize their purchasing muscle. A total program was proposed and after an intense analysis, the bank determined that they could put a program in place and realize both hard cost savings and improved efficiencies that would result in a soft cost savings associated with purchasing goods.
The Concentric Sourcing team then went to work on the development of a completely customized infrastructure including both all of their products and a purchasing infrastructure that included buyers and approvers with budgets and spending limits built into the system. The item within the customized company intranet procurement portal includes all of their printed materials (brochures, banking forms and statements, stationery, business cards, marketing materials, and branded deposit slips and ATM rolls). A numbering system for all documents brought organization to this area. Concentric Sourcing was also able to bring their expertise on document security to the bank ensuring that they would maximize the safety of their critical documents – both for their customers and themselves. The program also encompassed all logo merchandise (night deposit bags, coffee mugs, pens, signage, and corporate apparel) within The Company Store component. Additionally, the program included all of their office supplies including computer and printer supplies. The site featured customized lists for the bank’s “approved items list” and was also customized specifically for each shopper, down to the specific items for each printer and other machines. This customization of the system was executed down to the last detail to make sure that each person using the system would experience ease of use and a time savings with easy access to all of the everyday expense items necessary to run their business.
Once the site was completed, a kick-off meeting was held with all of the branch managers and shoppers for training. After the initial training, each branch was visited to make sure everyone was comfortable utilizing the system. As is the case with all accounts, the bank was assigned a dedicated team including an Account Manager (accessible via phone, e-mail, and in person) to handle any and all details necessary for the very best service. The account also has interface with a Vice President of Sales, the Director of Client Services and our Executive Vice President. The program is monitored on a constant basis and a quarterly business review is held with executive teams from both parties to review the status and make the necessary adjustments. The goal of this program, and each one that we implement, is to keep every client for life.
Additional benefits to the bank include detailed monthly statement billing – a summary statement of all transactions – with just one check to cut. This includes extensive reports detailing all purchases by branch and cost center – allowing the bank to look at their expenses in a very strategic way. They were also able to take control of and improve their branding – with customized items, improved marketing materials (and a better system for distributing them), and consistency in all branding efforts. Best of all, they were able to save money across the board by leveraging their purchasing power. By partnering with Concentric Sourcing, the bank was able to focus on what they do best – taking care of their customers. At Concentric Sourcing, this is our idea of what being a business partner is all about – getting results. |
|
|
