Energy and Communications Savings Opportunities

When we look at our energy and communications invoices, do we actually understand the make up of the account or do we just look at the invoice total and move on. We say to ourselves “I must reduce the spend on that soon”. Does that soon ever come around? Or does a supplier fall in through your door some day with this fantastic offering that you just can not refuse to take? You sign up for a twelve month contract again! And after three or four months you are looking at the invoice total again and wondering where is this “fantastic offering”? Where are those savings?

Can you ask yourself these 4 questions?

  • Do I completely understand packages and bundles on my mobile account?
  • Do I completely understand my landline charges and how to secure a package most suited to my call pattern to reduce cost?
  • Have I ever had an energy audit completed to ascertain how I would reduce my energy usage and reduce cost on my energy?
  • Do I have my energy supply tendered to suppliers to achieve the best rates available?

If you have answered no to two or more of the questions above then it is more likely that your competitors might have the edge on you in controlling their costs ! Do you really want a situation like that?

We can call to your office free of charge and we can go through what you could be missing out on and how Auditel can help you reduce your costs. This meeting is free and our fee’s are structured on shared savings so our clients are on a gain from day one.

There is no excuse to not have the best available tariffs.

 

Why Procurement Support is Invaluable to Logistics Cost Management

“You wouldn’t buy a house without a lawyer or surveyor, so why would you agree a multi-million pound transport contract without procurement advice?”

Procurement adds value through the development of effective specification documents, strategic negotiation, improved overall performance and financial management. In addition, the functions’ in-depth understanding of the key drivers of the macro organisation can lead to added value in areas such as use of working capital.

Logistics teams often lack a strong link with their counterparts in finance. Procurement, on the other hand, is not only familiar with the environment inhabited by finance, but can also add credibility to any application put forward by logistics. By helping to translate requests into detailed strategic plans which each function can understand, procurement can drive the acceptance of logistics propositions and help to retain savings achieved within departmental budgets.

Procurement can act as a mediator and help logistics teams maintain good relationships with external suppliers. By handling complex negotiations, procurement plays the “bad cop” role and ensures logistics avoids getting drawn in to awkward discussions. This division of labour allows both functions to take advantage of their respective skillsets and ensures working relationships with external suppliers are as smooth as possible.

When properly employed, the skills, processes and tools used by procurement undoubtedly add value to logistics operations. By intelligently allocating tasks to each function, a collaborative approach allows both procurement and logistics to focus on their key strengths for the benefit of the business as a whole.

Procurement does not add Value

“It’s what I call Procurement with a capital ‘P’ that can be damaging to logistics. This is when procurement departments enter a logistics environment, roll out a string of systems and processes and expect to make savings based on their experiences with ‘similar’ operations.”

In most cases Procurement does not fully understand the logistics function and believe they can make savings simply because it is a large spend area. It is acknowledged that procurement does add value to the buying of commodities where standard procurement tactics are involved, however, this does not qualify them to be directly involved in logistics operations.

Logistics professionals are more than capable of defining their requirements and negotiating with suppliers therefore there is no need for procurement involvement. Often procurement participation proves to be time consuming, costly and, due to a lack of understanding of operations, does not always generate the correct solution.

“There are certain circumstances where procurement can provide valuable input to logistics operations, but only when employed as a support function.”

When it comes to these two functions collaborating, it is essential that the operation is led by logistics. Procurement can provide support and best practice advice, however, its lack of in-depth knowledge means its involvement should end there.