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Expense Reduction Analysts find 44% cost cutbacks for DLR

As well as wanting to achieve savings, Graham Gunn, Finance Director for Serco Docklands Ltd (operators of the Docklands Light Railway - DLR), was keen to ensure that all departments at the company’s two main sites were ordering office consumables in a controlled and structured manner.

But after conducting his own internal exercise to streamline the number of suppliers the company was dealing with, Graham discovered it was using a number of different suppliers.

Calling in ERA analysts, they were able to untangle the sticky web of ordering and achieve serious savings in these areas. Here’s how they did it.

"We were convinced that savings could be made in this area but were unsure of exactly how best to achieve them,” Graham recalls. “The idea of engaging ERA appealed firstly because their analysts have the necessary expertise and contacts to run a competitive tender exercise and secondly because of their no-savings, no-fee approach.”

Meeting with Expense Reduction Analyst Andrew Hamilton, it was agreed that expenditure upon stationery and IT consumables was the area that needed the most attention. Andrew set to work.

Andrew’s analysis yielded results that set the benchmarks for him to take a more staunch tack with Serco’s suppliers. He arranged meetings with the preferred suppliers and helped them to see how important it was that they were focused not only providing customers with great service, but also on keeping costs down for them too.

Serco now receives quarterly reports from their supplier, so they have accurate data on the quantity and value of goods purchased, and of savings made against the benchmark prices that Andrew determined.

And those savings are now averaging an impressive 44%!

“The feedback I have since received is that all departments, even those which were once reticent, are now buying regularly," Graham endorses. "It was very enlightening to see the results ERA was able to achieve.”

“Not only did we get a genuine insight into the variety and quantity of products being purchased, but the savings identified, even from incumbent suppliers, are well in excess of my expectations.”

source : ERA

 

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