SUSTAIN Lincolnshire is an initiative led by Lincolnshire County Council to promote and support resource efficiency amongst small and medium enterprises in Lincolnshire. This case study and our online information are intended to help manufacturers become more resource efficient, avoid unnecessary costs, make savings, whilst maintaining a sustainable theme.
Becoming smarter in the way a company carries out its purchasing of products and services will have a direct effect on profitability, and create a much better awareness in the sustainable use of resources, thus reducing waste in process, material and services.
Smart and Sustainable Purchasing advice is being delivered by Oakwell Management Services Limited as part of Lincolnshire County Councils SUSTAIN Lincolnshire Programme. For further information and support contact SUSTAIN Lincolnshire on 01522 589964 or email email@example.com.
Success stories – reducing costs and increasing profits …
Bendabit Limited are manufacturers of lighting kits for farming vehicles that are imported from China and Japan, making them road legal for UK roads. A small business that has been in existence for 20 years but struggling to keep investing in new products as costs are spiralling out of control for all the products purchased, and little idea of where to look for new suppliers, or indeed having the time to.
Cost avoidance and savings
Oakwell provided a free assessment of all purchasing spend and operating systems.
After an initial assessment of purchasing activity, it was revealed that the old established sources were showing signs of becoming price expensive and late on delivery, so a sourcing exercise bought new options for supply closer to home and at competitive prices, making savings possible. It was also revealed that better computer software could help control the various product options better.
Further savings were identified in haulage and shipping costs, and a model set of purchasing terms and conditions was established to better protect the company from price increases.
A review of training needs identified several areas for further support.
With some additional costs for software taken into account, it is anticipated that there will be savings of approximately £4,500 per annum, and if plans to increase sales are adopted as cost pressures are relieved, this could double in the second year of intervention.
• Reviewed suppliers with expert advice on new sources and negotiated better pricing. Local suppliers had not been reviewed for some time and it was revealing for Bendabit, who had concentrated their attentions further afield, as the impression was no local sources existed. In future the lesson learnt meant that the company would adopt a more proactive approach to finding the best sources of supply.
• Accepted the review of the software required to better manage suppliers and cost control. There were various software options that might improve the way Bendabit operate, and they agreed to review all of the options with a clear view to getting the very best price for the product finally decided upon.
• Time is always a limiting factor with SME’S, but Bendabit after the initial intervention by Oakwell, accepted the need for more training in sustainable purchasing, and agreed to adopt the principals in the sustainable purchasing workbook.
• To assist with the disposal of waste packaging produced at Bendabit, Bendabit were signposted to and approached EMTEX, the lead authority for materials sustainability in the East Midlands, who will be investigating if a small grant can be provided to aid in this area.
Bendabit Limited said; the sustainable purchasing intervention has helped change our immediate focus in the business away from simply getting goods out of the door, and turned us into ‘savings junkies’, totally engrossed in every penny spent to get best value. Although initially the savings will not be huge, it will allow us to investigate how to increase the company’s product range. The team that came also stayed longer than anticipated and left us feeling that they were really interested in helping me to do better, and not simply ‘ticking a box’, like many other initiatives that have come and gone over the years we have been in business.’