Expense Reduction Analysts Success Stories

“Expense Reduction Analysts have been excellent to workwith; they are experts at achieving savings whilst keepinga close eye on what else is important to the business.They have found economies that we could not havediscovered on our own, and they have always beensensitive to our long-established supplier relationships. I have asked them to look at further categories, and Ilook forward to working with them in the long term.”Wesley Hanson, Finance Director, Whale Pumps.

and USA. Recently they have developed arange of water and space heaters for theRecreational Vehicle market.

Wesley Hanson, Finance Director of WhalePumps, met with Brian Turbitt of ExpenseReduction Analysts in 2009 at the beginningof the economic downturn as part of astrategy of supporting competitiveness.Brian describes the manufacturer’s objectiveat that meeting: “Wesley Hanson wasobviously very interested in what we coulddo for his company, in terms of the savingsthat we could find. He stressed, however,that they had a strong relationship withtheir suppliers and did not want to riskdisturbing these for a percentage point ortwo. This was the basis on which we workedwith them; looking for ways in which wecould achieve savings for Whale Pumps andimprove systems where necessary whilstmaintaining the solid relationship they hadwith their suppliers.”

Reducing costs whilst adding value

Understanding the importance of supplierrelations to Whale Pumps, consultants BrianTurbitt, Neil Copland and Ian Morrisonlooked at areas of the business that theycould not only improve profits, but also addvalue to Whale Pumps operating systems.

Using their wealth of knowledge andexperience of various categories,Expense Reduction Analysts workedalongside Whale Pumps to identifyareas where costs could be reducedand value could be added to supplyprocesses.

Categories reviewed:Engineering consumablesDistributionElectricityStationeryPackaging

Whale Pumps is the product brand namefrom Munster Simms Engineering of Bangor,an independent company engaged in thedesign, manufacture, marketing and sellingof pumps, valves, faucets and plumbing(water systems) for use in mobile or lowvoltage environments. Whale Pumps hasbeen in existence for over 200 years andsupply to international customers operatingin countries including UK, France, Germany

The consultants recommendations thereforeallowed Whale Pumps to run more efficientlyat a lower cost.

Hanson asked Expense Reduction Analyststo start by reviewing the EngineeringConsumables, Stationery, Electricity,Distribution and Packaging categories of expenditure.

Ian Morrison, who undertook analysis of the first of those for Expense Reduction Analysts, takes up the story: “On Engineering Consumables, WhalePumps were very clear from the outset that they wanted to retain the incumbentsupplier. Having analysed the company’s£250,000 spend in this area, I felt that theywere not achieving best value. The supplieroffered a 6% discount, which we negotiatedup to 7%, however we still felt that WhalePumps should do better. We lookedupstream and identified the company thatwas supplying Whale Pumps’ supplier, andadvised them how to buy their product in a more competitive way. They benefitedfrom our advice, and Whale Pumps finallyachieved a 12% saving whilst maintainingthe same level of quality and service.”

find extra profitwww.expense-reduction.ie

A profitable partnership deliverssavings and supply solutions for Whale Pumps

Expense Reduction Analysts Success Stories

“We greatly value and, I would say, protectour supplier relationships, so I was verypleased with Expense Reduction Analysts’approach. They did not merely attempt to cut margins without regard for thebigger picture; they delivered savings that preserved – and in some cases – enhanced the goodwill betweenourselves and our suppliers” Wesley Hanson, Finance Director, Whale Pumps

Stationery does not move: proof of a responsible approach

The Stationery category provided furtherevidence of Expense Reduction Analysts’responsible approach, when theprocurement health check concluded that Whale Pumps were indeed achievingbest value.

Using valuable knowledge andexperience to overcome issues

Electricity proved to be a complex category.Neil Copland, who managed the overallproject for Expense Reduction Analysts,explains: “Whale Pumps were on a flexibletariff, using a generator at certain times ofthe year. Having analysed their electricalconsumption, we advised them todiscontinue the use of their generator andto move to a fixed tariff. Whale Pumpswelcomed this change as it offered themconsistency in cost. The complication arosewhen the price of fuel went down; we usedour experience and bargaining power tonegotiate with their electricity supplier andagree a new fixed rate that Whale Pumpswould benefit from.”

Loyalty to suppliers and staff

When identifying costs in the Distributioncategory, it became clear that Whale Pumpsemploy an admirable loyalty to theirsuppliers. Expense Reduction Analystsrevealed the opportunity for a saving of45% here, but one that necessitatedinternal changes. Whale Pumps decided notto pursue this course of action so ExpenseReduction Analysts instead worked with theincumbent supplier to achieve moderatesavings which benefited Whale Pumps whilstpreserving the working relationship betweenthem and their supplier.

Reducing packaging costs by over half

When analysing Whale Pumps’ packagingspends, it was found that they were notachieving the best value. Their packagingrequirements included corrugated brownboxes and lithographic printed packaging.Expense Reduction Analysts were able tosource a well established supplier that couldprovide both of these at the same high level of service Whale Pumps were used to, at a significantly lower price. Whale pumpsvisited the supplier to ensure that theservice levels met their requirements andimplemented the new supplier smoothly.This switch has resulted in a saving of 55% on Whale Pumps packaging.

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