Auditel’s Role

The Royal School had several major projects to run and needed support to manage them. They knew Auditel had the expertise to independently take on various projects, large and small.

Auditel’s consultants advised on ICT and business supplies, reviewed the catering operation, and continue to monitor and report on energy use. In addition they resolved practical and legal school
transport issues.

Not only did the School make savings in money and resource, but they saw an improvement in service
quality and in relationships with suppliers. Auditel worked independently, completing projects rapidly so that the School could benefit as soon as possible.

School Feedback

Working with Auditel means that my team can focus on core activities, confident in Auditel’s abilities to progress other projects
Jo Phillips, Director of Finance and Services

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Langley House Trust is an innovative Christian charity which provides specialist housing, programmes and support services to offenders seeking to live crime-free.

The Trust has had remarkable success in helping clients not to re-offend, with a reconviction rate of under 3% for those in their housing – one of the lowest rates in the country. Consequently, their services have expanded and there have been ever-increasing demands on the Trust’s resources.

Value for Money is a key issue for Langley House Trust. In fact the Homes and Communities Agency requires the Trust to publish an Annual Report showing progress in Value for Money.

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Auditel’s Martin Wallis had already worked with Langley House Trust to deliver some good wins, but these were mostly at a local level, and as Corporate Services Director David Wm. Reynolds explains, ‘We were keen to address some of the bigger areas of overhead which contribute to the costs of all our projects’.

The Situation

With a number of contracts coming to an end and their head office moving from Witney to Coventry, Langley House Trust saw the opportunity to do a complete review of their complex UK-wide telecoms infrastructure, comprising mobile phones, fixed lines and an MPLS broadband network. However, it was vital that any transition was effected smoothly and there were no breaks in services.

David Wm. Reynolds adds, ‘We knew we needed to take account of technical specifications and customer service as well as complex tariffs, so we wanted to work with a partner who understood our needs and the offers available from a huge number of suppliers.’

Lacking the time and resources to carry out such a major task in-house, Langley House Trust appointed Martin to work alongside their IT and Compliance and Assurance Managers.

Action Taken

He continues: ‘We all had a pre-meeting to decide on the process from tender, selection of partner, to transition and implementation. with the aim of achieving:

• Good quality of service
• Predictable costs from month to month
• Good management information
• Reduced overall costs
• Excellent customer service
• Better Value for Money

Martin first carried out a detailed review of costs and usage, before issuing a Request to Tender direct to the networks, as well as premium network partners. ‘Martin managed it all very smoothly and implemented the process exactly as planned. I usually only hear about things when they go wrong and I have heard very little!’

Results

Martin has delivered significant savings – money which will be better spent developing Langley House Trust’s services elsewhere.

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Helping Hands were approached by Auditel Consultant, Gillian Gibbon, to find out what they did and how Auditel could help to streamline their essential business costs. Impressed by Auditel’s proposal, Helping Hands asked them to look into their office supplies and energy costs.

Office supplies

Helping Hands were happy with the service offered by their current supplier, but didn’t have the in-house resources or expertise to carry out a benchmarking and tender exercise. They asked Auditel to analyse their expenditure to ensure they were receiving best value.

Ongoing management

In addition to releasing savings, Auditel’s ongoing monthly management of the supply contract list ensures that Helping Hands benefits on an ongoing basis from best prices from the supplier. As a result, Helping Hands is now benefiting from higher annual savings than originally projected.

Consolidation of energy costs

Opening an ever-increasing number of new sites, Helping Hands had a growing administrative headache in ensuring all energy contracts were managed effectively. They were keen to make use of Auditel’s considerable knowledge to consolidate the utilities contracts and achieve better buying power.

Auditel’s in-depth analysis and regular tenders to the electricity and gas markets have achieved great results, with hugely impressive savings of 46% on electricity and 67% on gas, and annual savings now running at £14,000.

Helping Hands Finance Director Andrew Wood says: “Auditel assists, hugely, in getting multiple suppliers onto a single supplier base, leveraging our buying power.”

Continuing support

Following this success, Auditel are now tasked with ensuring that all new sites are tendered as soon as they are taken on by Helping Hands, and they manage time queries and meter issues. Not only has this saved time and freed up Helping Hands resources, but it also ensures that best value is achieved at all times in the volatile energy markets.

Andrew adds: “The post-agreement auditing of invoicing gives great assurance there is no ‘creep’ or errors on pricing.”

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Lindab’s Financial Controller, Rob Evans, first met Auditel Cost Management Consultant, Paul Millican in 2013. Recognising that, whilst they were market leaders in ventilation products in the UK, they didn’t have the expertise or time in-house to properly manage their essential business overheads.

A perfect fit

With this in mind, they decided to give Auditel a go and asked Paul to review their stationery spend.

This initial project was a huge success, not just because Paul returned a significant saving of 33% on an annual spend of around £50k, but also because he quickly established relationships with various stakeholders across the business and other projects to review cost areas such as merchant cards, fuel, PPE soon followed.

Value-added peace of mind

Mike Goodspeed, Lindab’s Managing Director, comments, ‘It would be almost impossible to take on a full-time employee to do the work Paul has undertaken. He has a wide range of knowledge that we just don’t have in-house. But it’s not just the savings, it’s the knowledge that our costs are being professionally managed and kept under control and the peace of mind that it gives us.’

Impressive outcomes

The first really big project was to review car leasing and again Paul proved Auditel’s worth. By streamlining the fleet he returned a saving of 10% on a £438k annual spend, whilst also ensuring that the cars available to employees were a step up on their previous models! This was followed by a review of photocopiers and MFDs, which returned a 50% saving and a handy refund of £100k.

Going the extra mile

Mike adds, ‘Whilst we appreciate there is a commercial aspect for Paul we have always felt that whatever decision or advice we receive the overriding aspect is that it should benefit Lindab. Paul has always been prepared to offer support and advice even in areas outside of his remit.

‘His range of expertise is enabling us to maximise our potential with various suppliers.’

Rob agrees, ‘Sometimes the company culture can’t be changed to maximise savings, but even where there has been no financial reward for Paul, he has always been ready to get involved and help out.

Conclusion

‘Whereas most other cost consultants I have come across are “one trick ponies”, i.e. cost reduction only, Paul’s consistent attention to the business processes, attention to detail, thirst for knowledge about our products and advising what is best for the company is extremely refreshing.’

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Within the Bifold Group, Marshalsea Hydraulics, is a leading designer and manufacturer of high quality pumps and valves, and provides a range of stainless steel pressure intensifiers for subsea and topside applications.

Bifold Orange instruments has great expertise in electronic control and valve positioning for the valve and pump sectors, for use in hazardous areas in the worldwide upstream and downstream oil and gas industries. Together with Bifold Fluidpower they deliver complete systems for a wide range of industries and market sectors.

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In 2006, Bifold Finance Director, Andrew Revans, met with Auditel Cost Management Specialists, Mike Andrews and Paul Taylor, following an introduction by Barclays Ventures. Andrew says, ‘We were looking to grow the business and engaged Auditel as a resource to help us reduce costs.’

Outstanding results

‘The results Mike and Auditel colleague Paul Taylor have achieved speak for themselves: savings every year on electricity and gas supplies. Savings on telecoms, mobile fleet, vending machines and latterly on the surface water charges at our new site.’

The savings achieved

Initially, Auditel had impressed with a 16.7% improvement on an already competitive renewal offer received from a local broker for their electricity supply. Savings on gas of 20.8% soon followed, despite the need for built-in flexibility to mirror Bifold’s fluctuating consumption needs. The following year they returned a saving of 20.9% on mobiles – with the incumbent supplier and made further savings for Bifold on roaming costs when staff went overseas. The fixed telephone costs were also analysed and moved away from the imcumbent supplier with the benefit of almost halving the costs.

Proactive service

In 2014 Bifold moved to new premises. Paul and Mike, seeing an opportunity, completed a full area survey. First they contested the water charges, achieving a 47% reduction in charges backdated to the start of the year. Next came the electricity capacity level, which was set too high and they obtained a 50% reduction for Bifold. Paul and Mike have also made savings in Stationary, Vending machines, and Couriers and reviewed other categories such as waste and rates

Summary

Auditel have identified and managed savings opportunities, and provided invaluable support over a wide range of business areas to the Bifold Team for over 10 years.

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As a national provider of building management and maintenance work, Laker’s central delivery solutions encompass everything their clients and customers require to deliver a complete built environment service.

Laker BMS are continually evolving and adapting their solutions to meet bespoke client and customer requirements. These include all aspects of building maintenance, refurbishment and complete renewal programmes, reinstatement works, gas and electrical work, and construction.

Head office based in Birmingham, with offices in Brentford and Brentwood.

T/o will probably exceed £14M next year

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Having worked with Auditel’s Paul Millican in 2007/8, Laker’s MD, James Lakey, had no hesitation in asking for his help again in 2015, following a period of rapid expansion.

Knowledge and professionalism

James Lakey says, ‘I had just completed two new acquisitions, but due to our rapid expansion we had lost control of the supply chain.

‘So, initially, I asked Paul to come in and review our building materials costs and to support the planned and responsive repairs teams in Birmingham.

‘Having worked with him before, I had absolute confidence in his abilities.’

He wasn’t disappointed.

Going the extra mile

Paul reviewed their building costs and, despite some early resistance, quickly developed good relationships with the teams. His detailed analysis of suppliers and processes led to the introduction of a more streamlined supply chain, resulting in savings of 21% on a spend of £300k.

A delighted James Lakey continues, ‘Paul goes the extra mile to ensure that he really understands our business. Without being asked to, he visited all our sites, met the directors and developed a rapport with all the site management teams.’

Positive outcomes

In November 2016, Paul’s remit was expanded to include all purchasing materials including gas, heating, plumbing and electrical (M&E) as well as expanding the scope to include all building material requirements.

James Lakey says, ‘Once again Paul has excelled. His work has led to projected savings of ca. 20% on a spend which is currently around £3M. This is a significant amount of money for Lakers. It can be reinvested in the growth of the company and it makes us more competitive in tendering.’

Further projects have also been undertaken such as Fuel cards in mid-2016, which resulted in annual savings of 4% on a spend of around £500k and the waiving of account fees that were being imposed by the incumbent supplier.

Conclusion

James Lakey continues, ‘I really can’t praise Paul’s work highly enough. He is an absolute pleasure to work with and has made a significant contribution to the financial future of our company. I look forward to working with him on the next projects we have planned.’

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Rendcomb College became fully co-educational in 1992. The Junior School was added in 2000 and the Nursery opened in 2005 providing a continuous education at Rendcomb College from the age of 3 to 18.

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Rendcomb’s Bursar, Eleanor Sharman, was initially sceptical when approached by Auditel Consultant, Simon Gibson, but quickly recognised that the College could benefit from the wealth of independent market knowledge that Auditel offered across a wide range of cost areas.

Good market intelligence

She explains,’I have always been wary of procurement consultants where the ‘savings’ normally seem to evaporate into fees. [Auditel] struck me as being a little different to others, therefore I agreed to engage them.’

Her instincts have paid dividends. ’We have had the benefit of good market intelligence which is sometimes hard to come by, plus a real person to talk to who has been prepared to go into bat for us with poorly performing suppliers.’

Positive outcomes

Simon, with expert assistance from Auditel colleague, Mark Stevens, has scored some notable victories. None more so than the successful negotiation out of a punitive evergreen print/ copier contract into a much more successful one which will continue to deliver cost savings and performance enhancements for years to come.

They have also achieved savings on a number of other cost areas including both fixed line and mobile phones and heating oil

Peace of mind

Simon says, ‘Many suppliers see Independent Schools as good sources of income, but like any other business they need to make their books balance. Rendcomb College value not only the sustainable savings we deliver, but also our unbiased market intelligence, supplier control and problem solving. They also enjoy the peace of mind that we are always working with their best interests at heart.’

Highlights in numbers

Highlights in numbers Using their independent market knowledge, Simon and Mark have delivered impressive, yet sustainable, savings for Rendcomb College:

• £4,500 per year on their Fixed Line Telecoms and system, and negotiated down excessive charges for Broadband Data Lines
• £2,000 per year on Mobiles Phones and additional Tablet hardware
• £5,000 per year on Heating Oil
• £75,000 over 5 years on copiers and print and extricated them from a poorly performing contract to a fully integrated solution with a target to further reduce paper consumption

In addition, the Auditel team has provided expert advice on waste, water and various other cost areas on a retainer basis.

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It has been in business since 1786 and makes a large range of premium bespoke, fitted saddles for sale across the world.

It owns and trades through the widely known Harry Dabbs range and also makes the largest range of horse whips in the world with some 1,500 different whips.

Through acquisition it now owns the Thermatex range of clothing and horse rugs and in early 2015 acquired E Jeffries, a renowned saddler and specialist handbag manufacturer (Brady Bags). Peter Wilkes is currently President of the Society of Master Saddlers.

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The power of Auditel lies in the range of expertise that exists within its 200 strong network of affiliates. With knowledge and experience of almost all sectors of the economy spread across the network, Auditel can call on industry experts to examine a huge and diverse range of cost areas.

A lack of in-house procurement skills

In 2014, Peter Wilkes, MD of Vale Brothers Ltd, appointed Auditel to perform a comprehensive review of its entire cost base.

He explains, ‘We knew that as a company we were very good at growing the customer base and producing top quality products, but we recognised that we didn’t necessarily possess the management skills in house to procure the best deals and tightly manage suppliers. Some of our relationships were long standing and we suspected there might be savings to be made.’

A complex cost base

Across its three divisions, Vale Brothers has acquired a diverse set of complex products over the years, which require a disparate range of raw materials. This has led to a complex and challenging supplier base.

The Saddlery industry in the UK has its centre in Walsall where about sixty different companies are located within a few square miles.

For many products one or two local suppliers serve almost the entire marketplace, although other quality suppliers do exist elsewhere in the UK and abroad.

In addition to the already complex cost base, Auditel had to take into account the ongoing takeover of a similar sized competitor (E Jeffries) and how the two sets of costs would be subsequently merged.

A comprehensive review

After discussing a plan of action, it was agreed that Auditel would handle the procurement routines whilst the client retained control of signing off on quality.

Auditel set to work on key raw materials such as leather supplies – hides, soft hides and calf skin used in the making of saddles; acrylic yarn for the Thermatex horse rugs; clothing supplies, and plywood.

Auditel sector specialists were brought in to review Freight, Couriers and Packaging to ensure that the client received the very best attention and access to industry expertise. As a result, 19% savings were found in the area of freight/overseas shipping costs.

Teamwork

Working closely with Vale Brothers’ management team advising on quality requirements, Auditel researched the market for a range of suppliers, ran a competitive tender process and reported and analysed the results.

Leather suppliers were contacted in Germany and Italy as well as in the UK and samples were obtained for quality review by the management team. Acrylic yarn suppliers are in short supply in the UK, but Auditel’s investigations unearthed new suppliers to enter a tender process and one of these was duly appointed.

Relocation

Auditel then turned their attention to Gas, Electric, Merchant Card fees and Phones. With two of their three factories along with Jefferies’ moving into a single bigger building, these costs had to be renegotiated carefully for the new premises. This relocation allowed Auditel to renegotiate current contracts and achieve very commercial rates.

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LoneStar Fasteners Europe is based in Wednesbury in the West Midlands and is the major trading site for Europe in the Group. Its markets are the Oil and Gas, Petrochemical, Renewable Energy and Power Generation sectors and the world prices for oil, gas and electricity are significant factors in its trading markets.

In the recession years 2008 – 2014 the price of crude oil soared to in excess of 100$/ barrel. On the introduction of US Shale Gas OPEC responded by overproducing in an attempt to see off this new competition. Prices plummeted to as low as 28$/ barrel and it is only recently there has been a mini recovery to around 48$/ barrel. An uncertain and sometimes volatile market.

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LoneStar Fasteners’ FD, Jon Evans enaged Auditel to take an objective, fresh look at their costs and identify sustainable savings opportunities. He says, ‘We knew that as a company we were very good at growing the customer base and producing top quality products, but we recognised that, whilst we had an inhouse Purchasing Team, they were focussed on many of the raw materials and did not necessarily have the time or the expertise to review some of the more complex administration overheads.’

A detailed approach

He continues, ‘What we liked about the Auditel offering was their very detailed approach.They examined all elements of the cost category, and gave us confidence that the job had been done completely.’ Auditel’s comprehensive approach not only takes headline costs into consideration, but also processes, contractural terms, supplier relationships, service needs and billing errors.

Focus and pace

Jon continues, ‘My team does not have the time to perform the vast amount of work that Auditel undertook. They provided focus and pace to make sure the job got done. It was all done with very little fuss although they were always careful to involve us when we needed to make a decision.’

Initial review

Following an initial review of the entire cost base, it was clear that some costs were already being managed tightly in-house. John Wardle, heading up the Auditel team says, ‘Only those cost areas were selected where Auditel could add most value with our specialist knowledge and experience.’

UK and Overseas Couriers

For example, in their comprehensive report on the UK Couriers Project, Auditel found that the quality of LSFE’s existing deal was so good that they recommended remaining with the existing supplier.

Despite the work they put into these findings, Auditel made no charge, as no improvements were made.

The Overseas Courier Project, however, was different. Auditel set about benchmarking the current suppliers to today’s marketplace. Through the detailed forensic work it became clear that improvements could be made to the terms in not only the movement of boxes but also in pallets and general freight. Suppliers were researched, interviewed and took part in a detailed tender exercise.

This led to an overall saving of 22% in both rates and additional fees

Fuel Cards and Telecoms

This attention to detail has subsequently led to savings of 8% on Fuel Cards and  28% and 10% on mobiles and landlines respectively.

Following these successes, Jon has asked them to continue the good work and review their Waste, Stationery and Postage costs.

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In 2012, Auditel were introduced to Tout’s Budgens by their Action Coach. He suggested that outsourcing their cost management would allow them to focus more on their main business activities.

Managing Director, Jonathan Tout says: ‘Initially my in-house accountant was skeptical about the need for the service. But she had so much else to focus on that termination dates and renewals slipped through the gaps.”

Energy costs

Managing energy supplies can be a challenging process – terminating, tendering and securing contracts at the right time and Tout’s were struggling to manage them across their four stores.

So they were glad to let Auditel manage the whole process for them, tendering to the whole of market to achieve the very best price.

Auditel Consultant, Mike Keig, says: ‘For Jonathan this means that he can leave absolutely everything to do with his energy supplies to us. If he has a question, whether it relates to a supply issue or is a consumption query, we obtain an answer for him.’

Jonathan was delighted and other cost areas soon followed. At the end of the first year he said: “Auditel have made significant savings across many cost areas for Touts Budgens, and we have seen significant reduction in our costs as a result of their efforts. With regards to our energy, they saved us over £10,000 in the first year!“

New Projects

Over the last 12 months Jonathan has engaged Auditel to review waste services at each store, leading to a 29% saving and telecoms, where a saving of 34% has been achieved. Auditel have also reviewed merchant card services recently, achieving savings of 31%. Auditel are currently looking at a project on water and waste water for the company.

Jonathan adds: ‘Auditel manage all the cost areas we have handed over to them from start to finish. All we have to do is to discuss and agree their recommendations.’

Unexpected results

He continues: ‘Each time we ask Auditel to look at a new cost area they undertake their thorough investigation of what we are currently buying as the first key step in the process. This in itself has uncovered all sorts of opportunities for savings ranging from replacing 08 phone numbers with an 01 number, to identifying that spending £10k on digging a bore hole for our water would have a return on investment of under 2 years!

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