ProSource Newsletter No 6 - Sepetember 2005
Increase your available funds
..... by saving up to 20% on your current costs
Despite all the wonderful work that Not for Profit organisations put into fund-raising and generating additional income and revenue, how much time and effort are you able to allocate to reducing your operating costs and maintaining your service delivery. There is another way which may well deliver the same or even better outcome, which in turn will increase or release available funds to grow and enhance your organisations services.
To achieve results in areas that are directly under your control (i.e. spend), it still requires resources with the time and specialist skills to realise the potential savings. With the slimming down of organisations, many simply do not have these luxuries available to put into effectively managing their spend.
This is where ProSource Australia can help you to achieve the optimum combination of Service, Quality and Cost from your many suppliers.
In addition, when supply agreements are set up correctly, it will significantly reduce the amount of internal time and effort required for your organisation to manage these, including reporting and reviewing performance. An overall Supply Chain Review, including those of your suppliers, can and will identify where processes can be eliminated or streamlined, to provide operational and cost benefits to your organisation.
So, what are some of the key elements to understanding and controlling spend? :
For existing Contracts/Supply Agreements:
Analyse spend across the board, by:
* Category (service or goods)
* $ Value
* Importance to business
* Supplier
* Users
* Ensure internal accounts are well structured and used, so that spend is correctly captured
* Identify urgent requirements which incur penalty charges
* Identify “leakage” against supply agreements
* Review existing Contracts/Supply Agreements for compliance
* Review supplier performance against any existing measures
* Identify expiry dates of Contracts/Supply Agreements
For establishment of new Contracts/Supply Agreements, an outline of our process is as follows:
* Identify key opportunities for review
* Select internal personnel to be involved in review process
* Map all processes for major supply categories; from internal demand planning to delivery of goods and services to end users.
* Consider alternative ways of achieving same result
* Cut out unnecessary processes, using technology as far as possible
* Clearly define requirements for these goods or services
* Define characteristics and weighting, against which supplier proposals will be evaluated
* Define Service Level Agreements and Key Performance Indicators against which supplier will be measured (with penalties).
* Investigate combining spend/negotiations with other like organisations
* Prepare Tender document
* Qualify potential suppliers
* Evaluate supplier responses to tender document
* Select supplier, fully document Supply Agreement
* Structure contract to give inducement to suppliers to provide ongoing' savings
* Set up ongoing review processes, to monitor performance against Service Level Agreements and Key Performance Indicators
* Monitor technology changes that can provide benefit
Examples of areas of spend where ProSource Australia can work with you to achieve savings include:
* Telephony (including services such as landlines, mobiles, teleconferencing, data communication)
* Printing and Stationery
* Cleaning
* Furnishings and Electrical Equipment
* Property Acquisition, rentals and leasing
* Security
* Travel
* Vehicle Acquisition and leasing
* Fuel/Lubricants
* Freight and Distribution
* Banking
* Insurance
* Food
* Packaging
The question that you may well be asking is what level of cost savings can be achieved if this approach to controlling expenses was adopted? Based on an assessment of the organisations overall spend in the above areas, our experience indicates that savings of up to 20% can be achieved in the first year and most importantly, sustained on an ongoing basis. There are also some instances where further cost savings can be achieved in the following years.
With that level of saving it can add significantly to increasing revenue or releasing funds to enhance and build on current service delivery and client support.
ProSource Australia is indebted to David Moore, Principal of DMA Operations Consultancy for providing this insight into how cost savings can be made in your organisation.
At our next ProSource Australia Breakfast Seminar on Tuesday November 8 at the Vibe Hotel, Milsons Point, David Moore will be presenting a detailed overview of how you can achieve cost savings in your organisation. Included below are the details and how to register for this FREE Breakfast.
ProSource Australia Breakfast Seminar - Tuesday November 8, 2005
Increase your available funds ..... by saving up to 20% on your current costs
Venue
Vibe Hotel
88 Alfred St
Milsons Point
Date and Time
Tuesday November 8, 2005
7.15 a.m. to 9.30 a.m. (full breakfast and handout notes included)
About our Guest Speaker - David Moore
David is the principal of DMA Operations Consultancy and has an honours degree in Mechanical Engineering and for over 25 years has worked in senior operations roles for a number of companies both here and in the United Kingdom. He specialises in identifying and then implementing strategies for his clients to reduce costs and enhance and sustains business performance.
Booking
To register for the FREE ProSource Australia Breakfast Seminar, simply forward your e-mail confirmation to info@prosource.com.au. If you require parking please indicate this when booking. Numbers are limited for this FREE Breakfast, so please book by Friday October 28, 2005
- A ProSource Thought -
If we are to achieve results never before accomplished, we must expect to employ methods never before attempted
Francis Bacon
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