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PROFIT NEWS
   INSIDE THIS ISSUE
   Mailing Surcharges                                                               Apple vs Samsung
   Bruce Murray explains how to avoid extra costs                                   The battle of the technological giants

   A Glowing Report from Celotex                                                    Adapting to the Economic Climate
   Detailed analysis result in significant savings                                  Laurence Knott explores marketing in a recession




   “The analysts definitely proved their expert status across all of the categories
   they reviewed for us, their knowledge was invaluable and they required minimal
   input from us. They were conscientious in their approach when dealing with our
   stakeholders which was important to us and our reputable brand. Aside from
   uncovering significant savings and improving our processes, each of
   the consultants was a pleasure to work with.”
   Oskar Wakare, Financial Director of GMK




Expense Reduction Analysts Success Story



Big Bang for Bucks
Significant savings and procurement improvements for GMK Ltd


G
            MK Ltd, formerly known as Gunmark,            that are legally allowed to carry them. GMK Ltd had                                                                 accounts would be complicated and time consuming,
            is the UK’s leading shooting sports           two suppliers in place, one which carried ammunition                     Merchant card fees                         but Expense Reduction Analysts made sure it was a
            distributor and has been trading since        and another for the distribution of guns and other                                                                  straightforward process. It was reassuring to have an
            1971. GMK Ltd exclusively represents          shooting paraphernalia.                                    Consultant, Paul Davidson, was brought in to review      expert there to assist and ensure it all ran smoothly.
many well known brands for shooting apparel and                                                                      GMK Ltd’s spends on merchant card fees. The              Expense Reduction Analysts were able to secure a
also provide guns and shooting equipment to the UK        Charles worked with the suppliers to streamline the        company had numerous accounts provided by 2              significant saving in GMK Ltd’s spends on marketing
Law Enforcement and Ministry of Defence.                  dispatch process with one carrier to take all goods        different suppliers; Paul recommended simplifying        print. GMK Ltd were pleased with the service they
                                                          excluding ammunition, where the contract with the          this process by consolidating all of their accounts to   were receiving with the print supplier they had in
GMK Ltd engaged Expense Reduction Analysts in             incumbent supplier was maintained. This uncovered a        a single supplier. This uncovered an annual saving       place; whilst maintaining the relationship between
September, 2009. Consultant, Danny Rogers met with        saving of 19.5% and a significant reduction of time in     of 21.4% and an improved service for GMK Ltd as          GMK Ltd and the supplier, Danny was able to secure
Paul Charleston, GMK Ltd’s Warehouse Manager              the warehouse, with much fewer invoices to process.        it allowed them to manage only one bank for each         a saving of 20% by working with the incumbent
to discuss areas of the company where procurement                                                                    of their different accounts. The chosen supplier also    supplier to renegotiate GMK Ltd’s contract at a lower
could be improved and savings could be achieved.                        Significant savings                          provides a dedicated Relationship Manager to handle      price.
                                                                                                                     GMK Ltd’s accounts, meaning they won’t have to call
Danny enlisted the assistance of his colleague,           Speaking of this project, Charles said: “Initially, this   bothersome help lines if they incur an issue which is    Danny appointed Brian Holmes, expert in telecoms,
Charles Reid, to analyse GMK Ltd’s expenditure on         was a tricky implementation due to the sensitive           an additional improvement.                               to review GMK Ltd’s spends on their fixed telecoms.
distribution. This category was not straightforward       cargo, but with patience and bringing the correct                                                                   Brian identified a new supplier that was able to offer
as firearms and ammunition are a specialist category;     contacts into play from the supplier, good service         Lyn Emery, Purchase Ledger Administrator said: “I        a better service for less than GMK Ltd were paying.
therefore there are a limited number of parcel carriers   levels and a significant saving was achieved.”             was initially nervous as I thought rearranging our       This resulted in a saving of 17.1% and an improved
                                                                                                                                                                              visibility of GMK Ltd’s international calls.

                                                                                                                                                                              Speaking of this partnership, Danny said:
                                                                                                                                                                              “GMK Ltd is an unusual type of client for us. As their
                                                                                                                                                                              products are of a sensitive nature, there were many
                                                                                                                                                                              challenges with risk and legalities, especially in the
                                                                                                                                                                              areas where we implemented new suppliers, but
                                                                                                                                                                              overcoming these obstacles was rewarding. Our
                                                                                                                                                                              projects for GMK Ltd delivered fantastic results, not
                                                                                                                                                                              only were we able to uncover significant savings, but
                                                                                                                                                                              also add value to their procurement – resolving issues
                                                                                                                                                                              they were encountering and improving the service
                                                                                                                                                                              they were receiving.”

                                                                                                                                                                              Table of Savings

                                                                                                                                                                              Category 	                               Saving(%)
                                                                                                                                                                              Distribution 	                                19.5%
                                                                                                                                                                              Merchant card fees 	                          21.4%
                                                                                                                                                                              Print 	                                       20.0%
                                                                                                                                                                              Telecomms 	                                   17.1%
EXPERT NEWS - Bruce Murray




Watch out for those mailing surcharges
Royal Mail offers three months grace period to get it right.

                                                                                                                  It also proposes to introduce a system of proportionality   requirements for DL and above sizes that are presented
                                                                                                                  whereby surcharges will be based on low volumes,            in trays to allow for 35mm of unsealed flap at either
                                                                                                                  medium volumes or high volumes of mail that have            end, up from 25mm.
                                                                                                                  failed to meet the relevant product specification.
                                                                                                                  It believes that this will ensure customers see a           In response to the Royal Mail tightening up their
                                                                                                                  surcharge more comparable with the scale and impact         checks of machinable mail against the specification, a
                                                                                                                  of not meeting the specification.                           number of mailing houses have revised their envelope
                                                                                                                                                                              specification to meet Royal Mail guidelines more
                                                                                                                                Sealing surcharges                            explicitly and to help avoid costly mail reversions.

                                                                                                                  Royal Mail plans to adopt a phased approach to the          When supplying outer envelopes, or artwork for
                                                                                                                  reimplementation of sealing surcharges after the            envelopes for machinable mail, please use the
                                                                                                                  grace period ends on the 15th September, which will         following specification for flap shape and glue areas
                                                                                                                  start at an additional 20% surcharge on the mail and        as a guide.
                                                                                                                  increase to 50% by November. From January all mail
                                                                                                                  that fails to meet the new sealing specification will be    Where outer envelopes are received outside of this
                                                                                                                  surcharged.                                                 specification, we ask you to confirm with your
                                                                                                                                                                              print/mail partner if these will attract a surcharge or
                                                                                                                  Finally, the company pledged to review its bulk mail        alternatively contact the ERA Print Team for further
                                                                                                                  specifications to ensure they remain appropriate and        advise.
                                                                                                                  to introduce minor changes to its envelope sealing

                                                                                                                  Envelope Specification



R
        ecently Royal Mail has outlined a series of      Following the subsequent furore, Royal Mail              Envelope Style:	                                            Wallet
        proposals which it hopes will quell the print    introduced a three-month grace period on sealing         Minimum Envelope Size:	C6
        industry backlash over its sudden increase in    issues in June and pledged to refund 90% of surcharges
reversion charges.                                       dating from March 2012 following intervention from       Maximum Envelope Size:	C4
                                                         the DMA and the Strategic Mailing Partnership.           Other Envelopes:	Any size that falls between C6 and C4
The company had come under fire after doubling the                                                                Side to Side Clearance:	                                    15mm minimum for all envelope sizes
number of staff in its revenue protection facilities     Royal Mail’s proposals, which it presented at a DMA
and stepping up the policing of its specifications,      summit in July, include publishing on its website a      Paper Stock:	Minimum 80gsm, Maximum 115gsm
which led to a dramatic rise in the number of mailing    league table of the most common faults together with     Envelope Flap Depth:	Minimum 40mm
envelopes found to be faulty and printers and mailing    advice on how they can be avoided.                       Preferred Envelope Design:	Straight Flap
houses facing surcharges of up to six figures.




 Expense Reduction Analysts Success Story                                                                         EXPERT NEWS - Jason Adderley


ERA find the right supply
solution for Prima Systems
                                                                                                                  Cash flow crunch
                                                                                                                  for law firms

P
         rima Systems is a family-run business           Prima’s Financial Director, Sue Halfpenny, was fed
         that manufactures, supplies and fits            up with her relationship with her incumbent provider




                                                                                                                  I
         windows for the construction industry and       but struggled to find the time and resources to embark
         local authorities. They were becoming           on the lengthy process of negotiating and transferring         n its latest quarterly survey, the Law Society’s      These trends represent a challenge for Finance
increasingly dissatisfied with their energy supplier,    supplier.                                                      Law Management Section (LMS) reported a               Partners and practice management staff, particularly
so employed the services of specialist procurement                                                                      deterioration in law firms cash flow positions. A     where modest profits and a poor working capital
advisors, ERA, to orchestrate a reduction in cost, and               Calling in the experts                             quarter of firms reported operating within 25%        position can bring pressure from the bank.
manage suppliers.                                                                                                 of their overdraft limit, whilst a sixth of firms were
                                                         So she called on the services of ERA. Paul Gannon,       operating within 10% of their overdraft limit on a          Naturally, firms can make efforts to improve their
This change resulted in a massive 43% savings -          Client Relationship Manager and Nadim Vanderman,         regular basis.                                              position in a number of ways. It makes sense to deal
equating to £8,319 - in the first year.                  Energy Project Specialist, seamlessly managed Prima                                                                  with foreseeable cash outflows such as bonuses,
                                                         System’s move from one electricity provider to           Some explanation for this can be found in Crowe             taxation, VAT and quarterly rental payments by
Prima Systems had a general awareness that they were     another.                                                 Clark Whitehill’s Solicitors Benchmarking Survey            converting work in progress to debtors and then
paying too much for their current energy alongside                                                                2012, which found that the average number of lock-up        collecting debts promptly.
specific grievances including:                                          Massive savings                           days has not improved significantly over the past year
                                                                                                                  – with 41% of firms experiencing lock-up in excess                              Cash flow
•	   The original supplier did not notify the company    Nadim negotiated with the incumbent supplier a           of 150 days.
     of a price increase                                 contract termination fee of just £1500, and then                                                                     Proactive cash flow management ought to be a
•	   They were hit with a £4000 ‘catch-up’ bill out      sourced an alternative provider. The move has resulted            Non-salary overhead costs                          strategic objective for firms, and should have a
     of the blue                                         in a 43% annual saving of £8,319 after the payment of                                                                bearing on the type and mix of work undertaken.
•	   The supplier failed to notify them of their         the termination charge.                                  Earlier in the year the LMS reported that non-salary
     contact renewal date, automatically binding                                                                  overhead costs per fee earner had grown 2.6% year           Needless to say, some of the most effective
     them to an expensive contract                       Notably, the energy contract has subsequently been       on year, bucking the downward trend seen in the             contributions to proactive cash flow management
•	   Attempts to resolve these grievances were met       reviewed each year by ERA with the objective of          last few years. This may, in part, be explained by the      can be derived from reviewing costs and processes to
     with an unwillingness to negotiate - although       keeping costs as low as possible.                        additional COFA and COLP regulatory roles (largely          ensure sustained best value, and exploring outsourcing
     they eventually offered a 40% discount on the                                                                adopted by Finance Partners) diverting resources and        opportunities.
     catch-up fee, the ‘damage had been done’.                                                                    attention from the management of costs and suppliers.
EXPERT NEWS - Laurence Knott                                                                                             Expense Reduction Analysts Success Story



Marketing your          Delivering savings
business in a recession and improvements in
                                                                                                                        Logistics for Celotex
                                                           If you have delighted clients that have not committed
                                                           their delight to print, make sure you interview them
                                                           for that all important testimonial. Once you have it,
                                                           ensure your future clients get to read it, so use your
                                                           web site, social media as well as print to communicate
                                                           the story.




                                                                                                                        C
                                                                                                                                   elotex is the UK brand leader of PIR         with products of high demand, the company typically
                                                                         Survey your clients                                       thermal insulation solutions for the         distributes around 60 lorry loads of insulation boards
                                                                                                                                   building and construction market. With a     each day. Ken undertook a detailed assessment of
                                                           As the economy changes, so do the needs of your                         history of continual product innovation,     Celotex’s UK Road Distribution and identified that
                                                           clients and prospects. This means that even if you           technical progression and an unrivalled product and     the company would benefit from a more innovative
                                                           surveyed your potential clients in the past and found        service package spanning over 85 years, Celotex         pricing structure than they currently had in place.
                                                           out what they need, that information is likely to be         remain the insulation specialist of choice.             Using his extensive market knowledge, Ken worked




Y
                                                           old news. You may find that your clients now require                                                                 with the incumbent supplier to restructure the pricing
                                                           different services and different information at different    As the fastest growing insulation category within the   scheme, making it both flexible and more cost
             ou’ve probably heard it many times, ‘the
                                                           price points. Therefore, you may want to survey your         UK, PIR insulation provides the ideal solution for      effective for Celotex. When addressing Celotex’s
             best time to market your business is during
                                                           target clients to find out what their needs are and how      meeting both current and future building regulations    operational requirements, Ken negotiated with the
             a recession’ but how do you actually
                                                           their needs are changing.                                    and other carbon reduction programmes. PIR              supplier to provide additional loading facilities at
             achieve that when your business isn’t
performing the way it should, which in turn is forcing                                                                  insulation delivers high thermal performance allowing   no extra cost. These solutions were implemented
you to consider reducing your marketing budget due                         Be more creative!                            homes and buildings to achieve premium levels           smoothly by Celotex, resulting in a category saving of
to cash flow constraints? Your competitors are likely                                                                   of energy efficiency and with some of the thinnest      11% and an improved process.
to be in the same boat and are probably reducing their     How effective is your current marketing? Do you rely         possible solutions.
marketing spends, so how can you take advantage of         on just one or two routes to market? It’s harder to find                                                             For more information on how Expense Reduction
the situation? This is a question on the mind of many      clients these days, so now is the time to review your                       Thorough review                          Analysts can assist you in uncovering savings and
business owners and marketing professionals right          current marketing campaigns and the channels that                                                                    improving procurement, visit our specialist Logistics
now.                                                       you use to communicate your messages. Research               In 2009, Celotex engaged Steve Rhodes of Expense        website: www.reduce-logistics-costs.co.uk
                                                           alternative marketing methods and test them. Are you         Reduction Analysts to assist them in reducing costs
The good news is that much can be done without             utilising online social networking for instance? There       and improving their procurement systems. Steve
spending money that you don’t have. There are ways         are some excellent and free tools to get your message        Rhodes enlisted the help of his colleague, Ken Rogers
of promoting your business and winning new clients         across. Do your homework, find out what others are           of Expense Reduction Analysts’ specialist Logistics
without increasing marketing spend. Many of the            doing and what works for them, then test and review.         Team who conducted a thorough review of Celotex’s
tips below are completely free and can be adopted          Use many different routes in order to bring in more
                                                                                                                        expenditure on Logistics. Celotex pride themselves on
straight away. One of the biggest barriers to success      buyers to your products and services.
                                                                                                                        the service they provide to their clients such as
is businesses who do not change their behaviours. We
live in times of great economic uncertainty and those                                                                   wholesalers and construction sites;
businesses that make changes and try new routes                               Get personal
to market will see positive outcomes versus those
businesses that do not. Try them for yourselves and        How much of your messages are tailored to your
monitor the results.                                       prospects? Your future clients are likely to get
                                                           bombarded by other businesses vying for a slice of
                                                                                                                            “We were incredibly impressed with the work of the
                                                           the action, so your campaigns really need to stand               consultants, who definitely proved their expert status.
                Ask for referrals                          out. Review your prospect, what’s happening to
                                                           their business right now, how is their market sector             Although the project required an investment of our time,
Referrals are one of the top ways of growing your          performing? Tailor your communications to their
                                                           business first; what do they need right now and how
                                                                                                                            it was certainly worth the results. Having previously
business. You probably know that you can increase
the number of referrals you get, radically increasing      can your business help? Do you have clients in the               made internal efforts to improve our procurement,
                                                           same sector or in their locality? Make sure they are
your client base, by doing one simple thing – asking
for referrals; but are you doing it?                       aware. You need to understand your prospect before               we found that the category knowledge and extensive
                                                           they understand you.                                             buying power of Expense Reduction Analysts was
             Ask for a testimonial                                                                                          of great assistance in delivering savings. As well as
                                                           Laurence Knott - Head of Commercial and
It’s what clients say about your business that really      Marketing Strategy, UK and Ireland                               achieving a significant saving in our logistic spends,
matters and what you want your future clients to read.     Expense Reduction Analysts
                                                                                                                            we now have an easier and consolidated supply chain
                                                                                                                            which is of real value to our organisation.”
EXPERT NEWS - Paul Giness



“For what it’s worth - the
importance of valuations”                                                                                                Mark Goddard Financial Director of Celotex
                                                                                                                         Speaking of the work Ken carried out in this category said:




P
         roperty News, an online magazine providing        business rates relief and Enterprise Zones, future            Other publications that recently featured
         property news, features and comment across        factors that will affect a property’s value such as           Expense reduction analysts experts...
         the South, South West & Wales and the             energy efficiency and the green credentials of a




                                                                                                                        S
         Midlands requested ERA’s senior consultant        building.
and lead property expert, Paul Giness to share his                                                                               imon Phippen contributed to Direct             field communications, augmented reality, image
advice for businesses on the importance of property        “Future factors may be a little speculative at this point;            Commerce magazine’s feature on packaging,      recognition and interactive TV. The article explores
valuations.                                                but it demonstrates a very tangible point: a financial                entitled “Boxing Clever: is your packaging     how retailers are implementing these technologies to
                                                           director can really benefit from keeping a close eye                  working for you and your customers?”           deliver a seamless shopping experience to customers.
                   Background                              on factors that will dictate property value in the future    The article demonstrated ‘key steps to success’
                                                           and getting wise to incentives, which could help them        including factors such as environmental, material       Paul Seddon, specialist on Higher Education
Paul is a chartered surveyor with 20 years’ experience     work around an inflexible ratings system.                    costs, protection of goods, security, shipping costs,   procurement was asked to provide his expert insight
in the property industry, he began his career with a                                                                    fulfilment and returns.                                 on UNI: University News and Insight’s article
national firm of chartered surveyors, specialising in      “In many ways rental values and the business rates                                                                   on the benefits and pitfalls of Higher Education
business rates - an area that has developed into his       they dictate can actually be a great yardstick for           Brian Holmes, communications expert with over           procurement consortiums. Collaborative procurement
core expertise.                                            organisations. Attitudes towards valuations are              25 years of industry experience, provided his           has been largely successful in the public sector with
                                                           constantly evolving and, if approached wisely, they          insights into in-store retail technology as part of     participation rates in the UK high in terms of both
Paul’s feature offered readers an insight into the         can offer businesses useful insights into when and           MyCustomer.com’s article, “Are in-store technologies    membership of the consortia themselves and the use
challenges of the current system of rating valuations,     how to invest in property – it just takes some forward       revolutionising customer experience?” on retail         of the framework agreements which are put in place.
government proposed solutions including the small          thinking.”                                                   customer’s increasing use of smart-phone apps, near
EXPERT NEWS - Brian Holmes




Apple vs Samsung
I
      n a landmark ruling in a U.S. Court, Apple            Samsung is currently considering increasing its
      was awarded $1.05 billion from Samsung over           reliance upon Windows Phone after its difficult legal
      alleged patent infringement on the Galaxy             loss to Apple. If that happens, it’s only good news for
      device maker’s part. The jury also found that         Microsoft. Granted, Samsung already offers Windows
Apple did not infringe any patents Samsung brought          Phone devices, but if the company leaves Android in
before the court. It was a major victory for Apple.         favour of Microsoft’s operating system, it’s a win-win
For its part, Samsung is expected to appeal the case        for the software giant and a major blow to Google.
and try to prove that it didn’t do anything wrong. In
addition, the company will attempt to keep selling          Now that Apple has won the ruling, there’s a good
devices that might face a ban on Dec. 6 when the U.S.       chance it’ll attack other Android vendors, and those
District Court judge holds a hearing on the matter.         vendors know it. So it wouldn’t be all that surprising
Apple is requesting at least eight Samsung devices be       if they run to Windows Phone to protect themselves.
banned from sale in the U.S. and inevitably this and
future rulings will have a major impact on Samsung                              Perception
globally.
                                                            From the consumer standpoint, Apple can be viewed
The fallout from this ruling extends far into the           as a bully and Android vendors might appear to be
technology space and Microsoft is one of the                copycats. Microsoft, meanwhile, is sitting on the
companies most affected by it. The software giant is        sidelines and out of the headlines.
trying desperately to catch up to Google and Android.
With Google’s chief vendor partner getting hit hard         So far, Apple hasn’t gone after Microsoft or Windows
by the court ruling, this might be Microsoft’s chance       Phone. That’s likely to be because Microsoft has such
to finally win one.                                         a deep patent portfolio that targeting the company
                                                            wouldn’t make much sense. As long as that continues,
          Good news for Microsoft                           Microsoft can do what it wants and watch Google
                                                            worry.
According to a recent report from the Korea Times,


Expense Reduction Analysts Success Story



ERA–Leading the
way to economic                                                                                                        Expense Reduction Analysts NEWS




recovery in Ireland Mobile Site Launched
                                                                                                                       E
                                                                                                                                 RA has launched a mobile version of their         “Our mobile friendly website still features all of
                                                                                                                                 website aimed at providing all of the latest      the latest news, comments and delighted clients
                                                                                                                                 procurement news whilst on the move.              that everyone has come to trust of us as specialist
                                                                                                                                                                                   procurement advisors, but with the functionality that
                                                                                                                                                                                   is required of mobile devices.” Chris continued.
                                                                                                                       “We have used the latest technology and development
                                                                                                                       techniques, which has meant that anyone can view
                                                                                                                       the website regardless of what device they are using.”      To view the mobile site for yourself, point your phone
                                                                                                                       comments Chris Aston, Marketing Director, ERA.              to www.expense-reduction.co.uk




                                                                                                                       EXPERT NEWS - Manoj Pabari



                                                                                                                       Update on the industrial
Y
            ou can’t fail to read the gloom and doom        work to do. Many businesses are simply not aware of
            that surrounds the Irish economy which          what ERA Ireland can achieve and our experiences



                                                                                                                       gases market
            remains deep in crisis, with no sign of an      show that our clients are delighted with the results. We
            immediate turnaround as the European            handle everything for our clients so they can continue
Union enters recession. Cash constrained business           to focus on their core business activities. Adding
owners continue to look for ways of injecting profit        value and profit back into the bottom line is only part
back into their books as every possible area of fat has     of the story, it’s how we manage our client’s on-going




                                                                                                                       M
already been trimmed to the bone, or has it?                business costs. It’s all about savings today, tomorrow
                                                            and into the future.”                                                     anoj Pabari, ERA associate and expert        gases can increase considerably for customers year
  More businesses turn to ERA Ireland                                                                                                 chemistry and pharmaceuticals advises        on year. Under these circumstances, it is normally
                                                                   Experts at achieving savings                                       that there is a lot of overpricing in this   difficult for individual companies to know what
Expense Reduction Analysts Ireland was formed in                                                                                      market, not because customers are not        the correct price to pay is. A significant example of
2009, adopting the tried and tested cost management         Current client Whale Pumps, who manufactures               keeping an eye on this cost area, but because this cost     a current worldwide shortage is helium. Not only
solutions that ERA UK has been using to reduce the          valves, pumps and plumbing systems for use in mobile       area by it’s nature is a very difficult area to keep on     has the price increased for helium, but suppliers
cost of doing business for over 20 years. In just a short   and low voltage environments, have been in existence       top of. Furthermore, customers are often in a difficult     are having to ration their existing customers, often
period of time, ERA Ireland has many well-known             for over 200 years, engaged ERA Ireland back in            position of not being able to directly negotiate with       prioritising them by industry such as manufacturing,
and not so well known businesses on their books and         2009. Wesley Hanson, Finance Director, Whale               suppliers as they are very frequently committed to          research, recreational uses.
currently has over 25 million Euros of client spend         Pumps stated; “ERA Ireland have been excellent             supplier agreements.
under review. Moreover, a year-on-year growth figure        to work with; they are experts at achieving savings                                                                    When there is significant shortage of a given gas type,
of 46% is set to rise, as more and more businesses turn     whilst keeping a close eye on what else is important       Manoj’s work not only enables clients to lower              suppliers are reluctant to take on new customers,
to ERA Ireland for help, as their effective self-funding    to the business. They have found economies that we         costs without affecting the service levels or product       which has recently been the case for helium gas due
cost management successes are talked about.                 could not have discovered on our own, and they have        quality, but also to ensure that their indirect costs are   to the shutdown of key market producers in countries
                                                            always been sensitive to our long-established supplier     minimised, as most clients are often unaware that           such as the USA and Australia.
Neil Copland, Director of ERA Ireland commented;            relationships and I look forward to working with them      various service enhancements are available to them.
“We are committed to reduce financial waste of              in the long term”.                                                                                                     It is not expected that this shortage will last forever,
medium to large businesses in Ireland. We are proud         Visit ERA Ireland’s website:                               1. The industrial gases marketplace periodically            but suppliers remain cautious about the immediate
of our successes to date; however, there is still much      www.expense-reduction.ie                                   experiences gas shortages thus the prices for various       availability.

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Profit News September 2012

  • 1. PROFIT NEWS INSIDE THIS ISSUE Mailing Surcharges Apple vs Samsung Bruce Murray explains how to avoid extra costs The battle of the technological giants A Glowing Report from Celotex Adapting to the Economic Climate Detailed analysis result in significant savings Laurence Knott explores marketing in a recession “The analysts definitely proved their expert status across all of the categories they reviewed for us, their knowledge was invaluable and they required minimal input from us. They were conscientious in their approach when dealing with our stakeholders which was important to us and our reputable brand. Aside from uncovering significant savings and improving our processes, each of the consultants was a pleasure to work with.” Oskar Wakare, Financial Director of GMK Expense Reduction Analysts Success Story Big Bang for Bucks Significant savings and procurement improvements for GMK Ltd G MK Ltd, formerly known as Gunmark, that are legally allowed to carry them. GMK Ltd had accounts would be complicated and time consuming, is the UK’s leading shooting sports two suppliers in place, one which carried ammunition Merchant card fees but Expense Reduction Analysts made sure it was a distributor and has been trading since and another for the distribution of guns and other straightforward process. It was reassuring to have an 1971. GMK Ltd exclusively represents shooting paraphernalia. Consultant, Paul Davidson, was brought in to review expert there to assist and ensure it all ran smoothly. many well known brands for shooting apparel and GMK Ltd’s spends on merchant card fees. The Expense Reduction Analysts were able to secure a also provide guns and shooting equipment to the UK Charles worked with the suppliers to streamline the company had numerous accounts provided by 2 significant saving in GMK Ltd’s spends on marketing Law Enforcement and Ministry of Defence. dispatch process with one carrier to take all goods different suppliers; Paul recommended simplifying print. GMK Ltd were pleased with the service they excluding ammunition, where the contract with the this process by consolidating all of their accounts to were receiving with the print supplier they had in GMK Ltd engaged Expense Reduction Analysts in incumbent supplier was maintained. This uncovered a a single supplier. This uncovered an annual saving place; whilst maintaining the relationship between September, 2009. Consultant, Danny Rogers met with saving of 19.5% and a significant reduction of time in of 21.4% and an improved service for GMK Ltd as GMK Ltd and the supplier, Danny was able to secure Paul Charleston, GMK Ltd’s Warehouse Manager the warehouse, with much fewer invoices to process. it allowed them to manage only one bank for each a saving of 20% by working with the incumbent to discuss areas of the company where procurement of their different accounts. The chosen supplier also supplier to renegotiate GMK Ltd’s contract at a lower could be improved and savings could be achieved. Significant savings provides a dedicated Relationship Manager to handle price. GMK Ltd’s accounts, meaning they won’t have to call Danny enlisted the assistance of his colleague, Speaking of this project, Charles said: “Initially, this bothersome help lines if they incur an issue which is Danny appointed Brian Holmes, expert in telecoms, Charles Reid, to analyse GMK Ltd’s expenditure on was a tricky implementation due to the sensitive an additional improvement. to review GMK Ltd’s spends on their fixed telecoms. distribution. This category was not straightforward cargo, but with patience and bringing the correct Brian identified a new supplier that was able to offer as firearms and ammunition are a specialist category; contacts into play from the supplier, good service Lyn Emery, Purchase Ledger Administrator said: “I a better service for less than GMK Ltd were paying. therefore there are a limited number of parcel carriers levels and a significant saving was achieved.” was initially nervous as I thought rearranging our This resulted in a saving of 17.1% and an improved visibility of GMK Ltd’s international calls. Speaking of this partnership, Danny said: “GMK Ltd is an unusual type of client for us. As their products are of a sensitive nature, there were many challenges with risk and legalities, especially in the areas where we implemented new suppliers, but overcoming these obstacles was rewarding. Our projects for GMK Ltd delivered fantastic results, not only were we able to uncover significant savings, but also add value to their procurement – resolving issues they were encountering and improving the service they were receiving.” Table of Savings Category Saving(%) Distribution 19.5% Merchant card fees 21.4% Print 20.0% Telecomms 17.1%
  • 2. EXPERT NEWS - Bruce Murray Watch out for those mailing surcharges Royal Mail offers three months grace period to get it right. It also proposes to introduce a system of proportionality requirements for DL and above sizes that are presented whereby surcharges will be based on low volumes, in trays to allow for 35mm of unsealed flap at either medium volumes or high volumes of mail that have end, up from 25mm. failed to meet the relevant product specification. It believes that this will ensure customers see a In response to the Royal Mail tightening up their surcharge more comparable with the scale and impact checks of machinable mail against the specification, a of not meeting the specification. number of mailing houses have revised their envelope specification to meet Royal Mail guidelines more Sealing surcharges explicitly and to help avoid costly mail reversions. Royal Mail plans to adopt a phased approach to the When supplying outer envelopes, or artwork for reimplementation of sealing surcharges after the envelopes for machinable mail, please use the grace period ends on the 15th September, which will following specification for flap shape and glue areas start at an additional 20% surcharge on the mail and as a guide. increase to 50% by November. From January all mail that fails to meet the new sealing specification will be Where outer envelopes are received outside of this surcharged. specification, we ask you to confirm with your print/mail partner if these will attract a surcharge or Finally, the company pledged to review its bulk mail alternatively contact the ERA Print Team for further specifications to ensure they remain appropriate and advise. to introduce minor changes to its envelope sealing Envelope Specification R ecently Royal Mail has outlined a series of Following the subsequent furore, Royal Mail Envelope Style: Wallet proposals which it hopes will quell the print introduced a three-month grace period on sealing Minimum Envelope Size: C6 industry backlash over its sudden increase in issues in June and pledged to refund 90% of surcharges reversion charges. dating from March 2012 following intervention from Maximum Envelope Size: C4 the DMA and the Strategic Mailing Partnership. Other Envelopes: Any size that falls between C6 and C4 The company had come under fire after doubling the Side to Side Clearance: 15mm minimum for all envelope sizes number of staff in its revenue protection facilities Royal Mail’s proposals, which it presented at a DMA and stepping up the policing of its specifications, summit in July, include publishing on its website a Paper Stock: Minimum 80gsm, Maximum 115gsm which led to a dramatic rise in the number of mailing league table of the most common faults together with Envelope Flap Depth: Minimum 40mm envelopes found to be faulty and printers and mailing advice on how they can be avoided. Preferred Envelope Design: Straight Flap houses facing surcharges of up to six figures. Expense Reduction Analysts Success Story EXPERT NEWS - Jason Adderley ERA find the right supply solution for Prima Systems Cash flow crunch for law firms P rima Systems is a family-run business Prima’s Financial Director, Sue Halfpenny, was fed that manufactures, supplies and fits up with her relationship with her incumbent provider I windows for the construction industry and but struggled to find the time and resources to embark local authorities. They were becoming on the lengthy process of negotiating and transferring n its latest quarterly survey, the Law Society’s These trends represent a challenge for Finance increasingly dissatisfied with their energy supplier, supplier. Law Management Section (LMS) reported a Partners and practice management staff, particularly so employed the services of specialist procurement deterioration in law firms cash flow positions. A where modest profits and a poor working capital advisors, ERA, to orchestrate a reduction in cost, and Calling in the experts quarter of firms reported operating within 25% position can bring pressure from the bank. manage suppliers. of their overdraft limit, whilst a sixth of firms were So she called on the services of ERA. Paul Gannon, operating within 10% of their overdraft limit on a Naturally, firms can make efforts to improve their This change resulted in a massive 43% savings - Client Relationship Manager and Nadim Vanderman, regular basis. position in a number of ways. It makes sense to deal equating to £8,319 - in the first year. Energy Project Specialist, seamlessly managed Prima with foreseeable cash outflows such as bonuses, System’s move from one electricity provider to Some explanation for this can be found in Crowe taxation, VAT and quarterly rental payments by Prima Systems had a general awareness that they were another. Clark Whitehill’s Solicitors Benchmarking Survey converting work in progress to debtors and then paying too much for their current energy alongside 2012, which found that the average number of lock-up collecting debts promptly. specific grievances including: Massive savings days has not improved significantly over the past year – with 41% of firms experiencing lock-up in excess Cash flow • The original supplier did not notify the company Nadim negotiated with the incumbent supplier a of 150 days. of a price increase contract termination fee of just £1500, and then Proactive cash flow management ought to be a • They were hit with a £4000 ‘catch-up’ bill out sourced an alternative provider. The move has resulted Non-salary overhead costs strategic objective for firms, and should have a of the blue in a 43% annual saving of £8,319 after the payment of bearing on the type and mix of work undertaken. • The supplier failed to notify them of their the termination charge. Earlier in the year the LMS reported that non-salary contact renewal date, automatically binding overhead costs per fee earner had grown 2.6% year Needless to say, some of the most effective them to an expensive contract Notably, the energy contract has subsequently been on year, bucking the downward trend seen in the contributions to proactive cash flow management • Attempts to resolve these grievances were met reviewed each year by ERA with the objective of last few years. This may, in part, be explained by the can be derived from reviewing costs and processes to with an unwillingness to negotiate - although keeping costs as low as possible. additional COFA and COLP regulatory roles (largely ensure sustained best value, and exploring outsourcing they eventually offered a 40% discount on the adopted by Finance Partners) diverting resources and opportunities. catch-up fee, the ‘damage had been done’. attention from the management of costs and suppliers.
  • 3. EXPERT NEWS - Laurence Knott Expense Reduction Analysts Success Story Marketing your Delivering savings business in a recession and improvements in Logistics for Celotex If you have delighted clients that have not committed their delight to print, make sure you interview them for that all important testimonial. Once you have it, ensure your future clients get to read it, so use your web site, social media as well as print to communicate the story. C elotex is the UK brand leader of PIR with products of high demand, the company typically Survey your clients thermal insulation solutions for the distributes around 60 lorry loads of insulation boards building and construction market. With a each day. Ken undertook a detailed assessment of As the economy changes, so do the needs of your history of continual product innovation, Celotex’s UK Road Distribution and identified that clients and prospects. This means that even if you technical progression and an unrivalled product and the company would benefit from a more innovative surveyed your potential clients in the past and found service package spanning over 85 years, Celotex pricing structure than they currently had in place. out what they need, that information is likely to be remain the insulation specialist of choice. Using his extensive market knowledge, Ken worked Y old news. You may find that your clients now require with the incumbent supplier to restructure the pricing different services and different information at different As the fastest growing insulation category within the scheme, making it both flexible and more cost ou’ve probably heard it many times, ‘the price points. Therefore, you may want to survey your UK, PIR insulation provides the ideal solution for effective for Celotex. When addressing Celotex’s best time to market your business is during target clients to find out what their needs are and how meeting both current and future building regulations operational requirements, Ken negotiated with the a recession’ but how do you actually their needs are changing. and other carbon reduction programmes. PIR supplier to provide additional loading facilities at achieve that when your business isn’t performing the way it should, which in turn is forcing insulation delivers high thermal performance allowing no extra cost. These solutions were implemented you to consider reducing your marketing budget due Be more creative! homes and buildings to achieve premium levels smoothly by Celotex, resulting in a category saving of to cash flow constraints? Your competitors are likely of energy efficiency and with some of the thinnest 11% and an improved process. to be in the same boat and are probably reducing their How effective is your current marketing? Do you rely possible solutions. marketing spends, so how can you take advantage of on just one or two routes to market? It’s harder to find For more information on how Expense Reduction the situation? This is a question on the mind of many clients these days, so now is the time to review your Thorough review Analysts can assist you in uncovering savings and business owners and marketing professionals right current marketing campaigns and the channels that improving procurement, visit our specialist Logistics now. you use to communicate your messages. Research In 2009, Celotex engaged Steve Rhodes of Expense website: www.reduce-logistics-costs.co.uk alternative marketing methods and test them. Are you Reduction Analysts to assist them in reducing costs The good news is that much can be done without utilising online social networking for instance? There and improving their procurement systems. Steve spending money that you don’t have. There are ways are some excellent and free tools to get your message Rhodes enlisted the help of his colleague, Ken Rogers of promoting your business and winning new clients across. Do your homework, find out what others are of Expense Reduction Analysts’ specialist Logistics without increasing marketing spend. Many of the doing and what works for them, then test and review. Team who conducted a thorough review of Celotex’s tips below are completely free and can be adopted Use many different routes in order to bring in more expenditure on Logistics. Celotex pride themselves on straight away. One of the biggest barriers to success buyers to your products and services. the service they provide to their clients such as is businesses who do not change their behaviours. We live in times of great economic uncertainty and those wholesalers and construction sites; businesses that make changes and try new routes Get personal to market will see positive outcomes versus those businesses that do not. Try them for yourselves and How much of your messages are tailored to your monitor the results. prospects? Your future clients are likely to get bombarded by other businesses vying for a slice of “We were incredibly impressed with the work of the the action, so your campaigns really need to stand consultants, who definitely proved their expert status. Ask for referrals out. Review your prospect, what’s happening to their business right now, how is their market sector Although the project required an investment of our time, Referrals are one of the top ways of growing your performing? Tailor your communications to their business first; what do they need right now and how it was certainly worth the results. Having previously business. You probably know that you can increase the number of referrals you get, radically increasing can your business help? Do you have clients in the made internal efforts to improve our procurement, same sector or in their locality? Make sure they are your client base, by doing one simple thing – asking for referrals; but are you doing it? aware. You need to understand your prospect before we found that the category knowledge and extensive they understand you. buying power of Expense Reduction Analysts was Ask for a testimonial of great assistance in delivering savings. As well as Laurence Knott - Head of Commercial and It’s what clients say about your business that really Marketing Strategy, UK and Ireland achieving a significant saving in our logistic spends, matters and what you want your future clients to read. Expense Reduction Analysts we now have an easier and consolidated supply chain which is of real value to our organisation.” EXPERT NEWS - Paul Giness “For what it’s worth - the importance of valuations” Mark Goddard Financial Director of Celotex Speaking of the work Ken carried out in this category said: P roperty News, an online magazine providing business rates relief and Enterprise Zones, future Other publications that recently featured property news, features and comment across factors that will affect a property’s value such as Expense reduction analysts experts... the South, South West & Wales and the energy efficiency and the green credentials of a S Midlands requested ERA’s senior consultant building. and lead property expert, Paul Giness to share his imon Phippen contributed to Direct field communications, augmented reality, image advice for businesses on the importance of property “Future factors may be a little speculative at this point; Commerce magazine’s feature on packaging, recognition and interactive TV. The article explores valuations. but it demonstrates a very tangible point: a financial entitled “Boxing Clever: is your packaging how retailers are implementing these technologies to director can really benefit from keeping a close eye working for you and your customers?” deliver a seamless shopping experience to customers. Background on factors that will dictate property value in the future The article demonstrated ‘key steps to success’ and getting wise to incentives, which could help them including factors such as environmental, material Paul Seddon, specialist on Higher Education Paul is a chartered surveyor with 20 years’ experience work around an inflexible ratings system. costs, protection of goods, security, shipping costs, procurement was asked to provide his expert insight in the property industry, he began his career with a fulfilment and returns. on UNI: University News and Insight’s article national firm of chartered surveyors, specialising in “In many ways rental values and the business rates on the benefits and pitfalls of Higher Education business rates - an area that has developed into his they dictate can actually be a great yardstick for Brian Holmes, communications expert with over procurement consortiums. Collaborative procurement core expertise. organisations. Attitudes towards valuations are 25 years of industry experience, provided his has been largely successful in the public sector with constantly evolving and, if approached wisely, they insights into in-store retail technology as part of participation rates in the UK high in terms of both Paul’s feature offered readers an insight into the can offer businesses useful insights into when and MyCustomer.com’s article, “Are in-store technologies membership of the consortia themselves and the use challenges of the current system of rating valuations, how to invest in property – it just takes some forward revolutionising customer experience?” on retail of the framework agreements which are put in place. government proposed solutions including the small thinking.” customer’s increasing use of smart-phone apps, near
  • 4. EXPERT NEWS - Brian Holmes Apple vs Samsung I n a landmark ruling in a U.S. Court, Apple Samsung is currently considering increasing its was awarded $1.05 billion from Samsung over reliance upon Windows Phone after its difficult legal alleged patent infringement on the Galaxy loss to Apple. If that happens, it’s only good news for device maker’s part. The jury also found that Microsoft. Granted, Samsung already offers Windows Apple did not infringe any patents Samsung brought Phone devices, but if the company leaves Android in before the court. It was a major victory for Apple. favour of Microsoft’s operating system, it’s a win-win For its part, Samsung is expected to appeal the case for the software giant and a major blow to Google. and try to prove that it didn’t do anything wrong. In addition, the company will attempt to keep selling Now that Apple has won the ruling, there’s a good devices that might face a ban on Dec. 6 when the U.S. chance it’ll attack other Android vendors, and those District Court judge holds a hearing on the matter. vendors know it. So it wouldn’t be all that surprising Apple is requesting at least eight Samsung devices be if they run to Windows Phone to protect themselves. banned from sale in the U.S. and inevitably this and future rulings will have a major impact on Samsung Perception globally. From the consumer standpoint, Apple can be viewed The fallout from this ruling extends far into the as a bully and Android vendors might appear to be technology space and Microsoft is one of the copycats. Microsoft, meanwhile, is sitting on the companies most affected by it. The software giant is sidelines and out of the headlines. trying desperately to catch up to Google and Android. With Google’s chief vendor partner getting hit hard So far, Apple hasn’t gone after Microsoft or Windows by the court ruling, this might be Microsoft’s chance Phone. That’s likely to be because Microsoft has such to finally win one. a deep patent portfolio that targeting the company wouldn’t make much sense. As long as that continues, Good news for Microsoft Microsoft can do what it wants and watch Google worry. According to a recent report from the Korea Times, Expense Reduction Analysts Success Story ERA–Leading the way to economic Expense Reduction Analysts NEWS recovery in Ireland Mobile Site Launched E RA has launched a mobile version of their “Our mobile friendly website still features all of website aimed at providing all of the latest the latest news, comments and delighted clients procurement news whilst on the move. that everyone has come to trust of us as specialist procurement advisors, but with the functionality that is required of mobile devices.” Chris continued. “We have used the latest technology and development techniques, which has meant that anyone can view the website regardless of what device they are using.” To view the mobile site for yourself, point your phone comments Chris Aston, Marketing Director, ERA. to www.expense-reduction.co.uk EXPERT NEWS - Manoj Pabari Update on the industrial Y ou can’t fail to read the gloom and doom work to do. Many businesses are simply not aware of that surrounds the Irish economy which what ERA Ireland can achieve and our experiences gases market remains deep in crisis, with no sign of an show that our clients are delighted with the results. We immediate turnaround as the European handle everything for our clients so they can continue Union enters recession. Cash constrained business to focus on their core business activities. Adding owners continue to look for ways of injecting profit value and profit back into the bottom line is only part back into their books as every possible area of fat has of the story, it’s how we manage our client’s on-going M already been trimmed to the bone, or has it? business costs. It’s all about savings today, tomorrow and into the future.” anoj Pabari, ERA associate and expert gases can increase considerably for customers year More businesses turn to ERA Ireland chemistry and pharmaceuticals advises on year. Under these circumstances, it is normally Experts at achieving savings that there is a lot of overpricing in this difficult for individual companies to know what Expense Reduction Analysts Ireland was formed in market, not because customers are not the correct price to pay is. A significant example of 2009, adopting the tried and tested cost management Current client Whale Pumps, who manufactures keeping an eye on this cost area, but because this cost a current worldwide shortage is helium. Not only solutions that ERA UK has been using to reduce the valves, pumps and plumbing systems for use in mobile area by it’s nature is a very difficult area to keep on has the price increased for helium, but suppliers cost of doing business for over 20 years. In just a short and low voltage environments, have been in existence top of. Furthermore, customers are often in a difficult are having to ration their existing customers, often period of time, ERA Ireland has many well-known for over 200 years, engaged ERA Ireland back in position of not being able to directly negotiate with prioritising them by industry such as manufacturing, and not so well known businesses on their books and 2009. Wesley Hanson, Finance Director, Whale suppliers as they are very frequently committed to research, recreational uses. currently has over 25 million Euros of client spend Pumps stated; “ERA Ireland have been excellent supplier agreements. under review. Moreover, a year-on-year growth figure to work with; they are experts at achieving savings When there is significant shortage of a given gas type, of 46% is set to rise, as more and more businesses turn whilst keeping a close eye on what else is important Manoj’s work not only enables clients to lower suppliers are reluctant to take on new customers, to ERA Ireland for help, as their effective self-funding to the business. They have found economies that we costs without affecting the service levels or product which has recently been the case for helium gas due cost management successes are talked about. could not have discovered on our own, and they have quality, but also to ensure that their indirect costs are to the shutdown of key market producers in countries always been sensitive to our long-established supplier minimised, as most clients are often unaware that such as the USA and Australia. Neil Copland, Director of ERA Ireland commented; relationships and I look forward to working with them various service enhancements are available to them. “We are committed to reduce financial waste of in the long term”. It is not expected that this shortage will last forever, medium to large businesses in Ireland. We are proud Visit ERA Ireland’s website: 1. The industrial gases marketplace periodically but suppliers remain cautious about the immediate of our successes to date; however, there is still much www.expense-reduction.ie experiences gas shortages thus the prices for various availability.