4C Associates


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4C Associates has the insight, technology and experience to drive rapid profit improvement.

We offer specialist consulting, technology and managed services to transform your costs. We apply industry and functional expertise to deliver exceptional benefits.

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4C Associates

  1. 1. Delivering Cost TransformationInsight, technology and experienceto drive rapid profit improvement
  2. 2. Our offer4C Associates specialises in improving the profit margins and valuations of organisations.Our business combines specialist Cost Transformation insight, expertise and cutting-edgetechnology to consistently deliver tangible benefits to our clients. 4C is a cost transformation specialist. We combine consultancy services, technology solutions and procurement outsourcing to help clients reduce and manage their costs. We offer specialist consulting, technology and managed services to transform the cost base of clients across multiple sectors. We apply industry and functional expertise to deliver tangible benefits. 2
  3. 3. About usExperience Our Team Real Savings DeliveringEstablished 2000 65+ in-house £62.6 million saved Business wide cost talented specialists for clients in 2011 transformation 3
  4. 4. Our experienceLogistics Financial Food & Drink RetailUtilities Public Sector Other Sectors 4
  5. 5. Our capabilities Opportunity Benefits On-going Cost Identification Delivery Management • Detailed assessment • Sustainable, long- • Locked in savings of realistic savings term benefits • Managed services • Savings delivery • Talented functional • Tracking tools roadmap and experts opportunity matrix • Expert support • Benchmark functions database • Bespoke tools • Optimisation tools • Best practice 5
  6. 6. Client delivery Target Actual ROI Client Savings Savings % £m £m Oil & Gas 25.0 32.0 27.0 FMCG 1.6 2.8 12.0 Financial 1.4 2.3 4.0 Services Financial 1.0 1.1 1.0 Services FMCG 2.2 2.6 2.0 Leisure 1.5 2.3 8.0 Retail 8.7 9.6 23.0 Financial 8.0 10.0 4.0 Services TOTAL 49.4 62.6 8.3 6
  7. 7. Our tools - procurement Process &Cost Analysis & Insight & Organisation Tracking &Benchmarking Innovation Optimisation Monitoring• Spend analysis by • Company profiles • Strategy analysis • Reporting category, vendor, • Industry reports • Category planning • Databases cost centre, etc. • News archives • Balanced scorecard• Dashboard Reporting • Benchmark data • Performance metrics• Value plan weighting • Specialist sector • Stakeholder knowledge feedback• ROI summary • Specialist industry knowledge 7
  8. 8. Our tools – supply chain OperationalProcurement Strategy Excellence Project & Risk• Tendering, including • CAST – supply chain • Six Sigma / Lean • Project planning e-tendering optimisation • Labour productivity • Communication• Collaborative • CLASS – warehouse • Asset utilisation • Monitoring sourcing layout & design • Operational • Reporting• Insight & innovation • Paragon – network processes • Change control & transport• Commercial & optimisation • Financial contract support • Post project review management &• Transition control • Risk identification• Implementation • Operational • Mitigation management & • Contingency• Audit & review control planning • Business continuity and disaster recovery 8
  9. 9. Functional expertise – Supply Chain & LogisticsLeading companies are using their supply chain and logistics capabilities to differentiate themselvesfrom their competitors in various ways; improved availability of products leads to increased sales,lower inventories reduce working capital requirements and efficient logistics improves theiroperating margins.Our experts work with clients tohelp them: • Develop supply chain strategy - meeting business strategy and minimising supply chain risk • Model the supply chain - assess various models and cost options using CAST • Design the logistics network to minimise costs using CAST and Paragon • Optimise warehouse and fleet requirements and insource/outsource model • Design and operate end to end tender processes including e-auctions • Project manage major change projects • Run Six Sigma operational process improvement projects, reducing variable costs e.g. labour, vehicle costs, fuel and stock loss • Improve financial and KPI reporting capabilities to drive management focus • Support M&A activitySome challenges we typicallyfind in this area include: • Supply chains no longer delivering against new business requirements • Fixed costs in the supply chain are too high • Networks and assets not fully utilised, driving increased costs • Third party suppliers not delivering against Service Level Agreement, resulting in need for change • Operational processes too manual leading to lack of visibility and high admin costs • Poor financial understanding in operations - lack of cost / profit focus • Low labour productivity 9
  10. 10. Functional expertise – CAPEX ProcurementCapital Expenditure (CAPEX) focuses on the procurement of property, factories, fleet orequipment, or the development of an existing asset at a cost exceeding the minimumcapitalisation threshold. Within most organisations, CAPEX procurement sits between directand indirect procurement.Our experts work with clients tohelp them: • Refine processes to support a more efficient MRO sourcing operation • Deliver year-on-year savings through spend aggregation and demand management • Work closely with distributors and manufacturers to introduce innovative practices across the product base • Consolidate supply chains • Reduce inventory via stock optimization programmes and product standardisation • Improve maintenance programmes with a focus on preventative maintenanceSome challenges we typicallyfind in this area include: • Fragmented supply chains • Vendor management at local levels • Decentralised processes, ordering and inventory management • Complications arising from the vast range of products and services involved and unpredictably of demand • Unplanned, reactive requirement of spare parts and services, which can encompass up to 50 per cent of total MRO spend • Disparate spend across multiple sub-categories and site locations
  11. 11. Functional expertise – HR & ResourcingPricing is a typically complex and non-transparent area within HR and resourcing. This istrue even in cases where detailed contracts are in place.Our experts work with clients tohelp them: • Improve service, contractual and commercial agreements • Ensure spend meets needs of HR community • Manage processes and contracts from an overall perspective, rather than fragmented throughout the business • Deliver HR procurement function embedded with key stakeholdersSome challenges we typicallyfind in this area include: • Areas within HR and resourcing are often fragmented, sometimes with no overall ownership • Sub-categories can have multiple stakeholders, many have emotional involvement with the current arrangements • These factors contribute to making this category an opportunity for significant savings but also one where opportunities are difficult to accurately identify and implement • As a result, many organisations implement sub-optimal arrangements, which are complicated to manage and maintain
  12. 12. Functional expertise – IT & TelecomsIT and Telecoms are fast-moving areas in which category-specific procurement expertiseadds tremendous valueOur experts work with clients tohelp them: • Understand exactly where technology spend is going • Buy only what they need to drive their business forward • Identify areas where their spend can be better managed • Exit safely and professionally from deals which do not meet their business needs • Leverage our expertise to pay the right price • Manage suppliers professionally and profitably • Improve the overall effectiveness of their technology spendSome challenges we typicallyfind in this area include: • Aggregating spend with providers across the business • Getting buy-in from various stakeholder groups • Determining the true requirements vs. nice-to-haves for technology • Over or under licensing for software • Understanding the true costs (particularly for managed services) • Inflexible requirements driving inappropriate commercial deals • On-going monitoring contracts both operationally and commercially 12
  13. 13. Functional expertise – MarketingMarketing is one of the largest areas of cost for many companies, however, it is also an areawhere return on investment is particularly difficult to quantify.Our experts work with clients tohelp them: • Identify ways of getting more from spend in areas such as media and advertising • Rationalise agency rosters - set up the best agencies at the right price • Benchmark rates to ensure client obtains best price for the work • Manage pitch processes and guide the marketer regarding commercial aspects, allowing them to concentrate on creative elements • Implement most effective remuneration methodology in different sub categories • Devise and manage incentive schemes - enable payment by results to function efficiently • Manage suppliers professionally and profitablySome challenges we typicallyfind in this area include: • Disparate spend across numerous sub-categories • Various fee structures across sub-categories and agencies • Difficulty engaging stakeholders • Tasks / services provided not straightforward and difficult to specify
  14. 14. Functional expertise – Mergers & AcquisitionsM&A activity is often one of the fastest ways to impact cost and a catalyst fortransformation. The key element behind successful M&A activity is the creation of synergybetween both companies. When two businesses join forces numerous opportunities arise,including more efficient use of resources, better economies of scale and increased marketpresence. A well carried out operation can lead to growth and increased profit.Our experts work with clients tohelp them: • Identify and shortlist targets • Plan business strategy • Negotiate and close deals • Carry out commercial due diligence • Achieve post-merger integration • Successfully manage the M&A process • Manage financial and legal due diligenceSome challenges we typicallyfind in this area include: • Limited or late involvement from procurement resulting in unrealistic objectives drawn up by senior management • Communicating success stories to stakeholders • Effectively integrating staff from both companies • Consolidating suppliers
  15. 15. Functional expertise – MROMaintenance, repair, and operations (MRO) focuses on the procurement of engineeringspare parts and site services for manufacturing equipment and production areas.Our experts work with clients tohelp them: • Refine processes to support more efficient MRO sourcing operation • Deliver year-on-year savings through spend aggregation and demand management • Work closely with distributors and manufacturers to introduce innovative practices across the product base • Consolidate supply chains • Reduce inventory via stock optimization programmes and product standardisation • Improve maintenance programmes with a focus on preventative maintenanceSome challenges we typicallyfind in this area include: • Fragmented supply chains • Vendor management at local levels • Decentralisation of processes, ordering and inventory management • Vast range of products and services involved and their unique unpredictably of demand • Unplanned, reactive requirement of spare parts and services can be as much as 50% of total MRO spends. • Disparate spend across multiple sub-categories and site locations • Uncommon part numbering systems leading duplication of stockholding 15
  16. 16. Functional expertise – Office ServicesWell-managed office services enable a business to operate efficiently and effectively, andcan positively impact on productivity and morale. To those outside the business, includingclients and potential employees, the quality of office services create the impression of theprofessionalism, creativity and culture of the business.Our experts work with clients tohelp them: • Define office service requirements • Deliver year-on-year savings through demand management and consolidation of goods and services • Develop output specifications, service level agreements and standard operating procedures • Work with suppliers to develop cost reduction and service improvement strategiesSome challenges we typicallyfind in this area include: • Finding the appropriate service levels to deal with the varying age, condition and layout of physical infrastructure, • Vendor management at local levels and/or a lack of clear specifications of required goods and services
  17. 17. Functional expertise – Professional ServicesProfessional services procurement is rarely about getting the lowest price. Most users - whoare typically senior business leaders - would consider paying more for better performance.Crucially, therefore, procurement cannot decide which supplier is offering the best value,and fails when it tries to do so.Our experts work with clients tohelp them: • Understand what deliverables to buy and how to best specify these to suppliers • Define bid evaluation criteria - ensure the quality of the proposal is effectively measured • Consider suppliers who may not have been considered before • Put in place and negotiate rate-cards with Key Suppliers • Run swift competitive exercises for live assignments • Implement internal Demand Challenge processesSome challenges we typicallyfind in this area include: • Balancing service fulfilment, risk mitigation, lead times and cost avoidance with pricing • Refining service specifications and translating them into outcome-based pricing • Ensuring expertise required is in line with expertise provided • Improving processes and policies that impact costs • Ensuring on-going measurement and feedback of provider 17
  18. 18. Functional expertise – Property & FacilitiesProperty and facilities service specifications are complex, and the costs of services are oftennot well defined or understood.Our experts work with clients tohelp them: • Understand latest market trends and approaches • Identify areas where spend can be better managed • Leverage our expertise to ensure market competitiveness • Professionally transition agreements managing legislative constraints such as TUPE • Develop service level requirements and continuous improvement • Manage suppliers professionally and profitably • Improve overall effectiveness of processes and latest technologySome challenges we typicallyfind in this area include: • Contracts are often difficult to administer • SLAs are often not well defined or easy to monitor • Hidden spend on non-core work significantly increases total spend • Operational managers lack purchasing support to assist with structuring competitive processes - ultimately true costs are not well understood 18
  19. 19. Functional expertise – TravelTravel is a diverse category which tends to generate an emotional response from largenumbers of individual users.Our experts work with clients tohelp them: • Understand exactly where the travel spend is going • Monitor and optimise travel supplier agreements in line with demand profile • Review and benchmark travel policies - identify areas where spend can be better managed • Exit safely and professionally from deals which do not meet their business needs • Leverage our expertise to pay the right price for the right service • Manage suppliers professionally and profitably • Provide insightful travel spend reporting to empower travel decision makingSome challenges we typicallyfind in this area include: • Travel is an emotive category - direct effect on how an employee sees themselves valued by the company • Purchasing control is over a vast number of individuals • Travel brings together a combination of multiple categories • Environmental considerations often have to be taken into account • Travel is an international category with all the additional complexities this adds • Travel is a data intensive area and analysis can be very complex • Policy compliance is a fine balance which if done poorly can result in massive overspend and alienation of the workforce
  20. 20. Case studyMore than £20 million annual savings delivered Objectives Approach & Outcomes • To work closely with AstraZeneca • Exceeded substantial savings targets on purchasing teams to identify, quantify each of the category-specific savings and plan specific category procurement delivery projects improvement projects – focusing on • Developed and introduced new ways of achieving rapid and sustainable cost working, implemented new purchasing reduction processes, category knowledge bases and • To achieve substantial savings by supporting tools to ensure savings are providing specialist category expertise, ‘locked in’ for future years sourcing methodologies and tools, • Managed AZ procurement training research, benchmarks and market programme to improve core skills information, cost analysis and modelling capabilities, process change • 4C’s project work with AZ won the CIPS and change management expertise ‘Procurement Excellence’ award in 2007 • To transfer knowledge and skills back to the AZ purchasing teams • Reduced annual cost base by more than £20 million across Europe and the UK
  21. 21. Case studyAnnual savings of over £20 million delivered across Europe Objectives Approach & Outcomes • To manage £350m of spend and drive • A 4C ‘quick-wins’ team achieved £500k of cost reduction through strategic sourcing negotiated savings within the first two and demand management months • To drive significant improvements in • Category management teams were Procurement’s engagement with key established and aligned to key spend business stakeholders categories (e.g. Logistics, Property & Facilities Management, HR and • To drive compliance to preferred Professional Services) contracts in order to maximise realisation of negotiated savings to the bottom line • 4C implemented a Procurement Helpdesk dedicated to driving • To provide a flexible resource model for engagement with stakeholders across O2 O2 to achieve rapid deployment of niche and compliance to procurement processes procurement expertise for projects as and policies. required • In excess of £20m annual savings delivered
  22. 22. Case studyMulti-million pound annual savings across five continents Objectives Approach & Outcomes • To conduct a comprehensive diagnostic • 4C deployed a core team that was review of BG Group’s indirect spend, supplemented by category experts as including spend analysis, interviews, required through the projects process reviews and benchmarking to • 4C-led sourcing projects covering a wide identify and quantify savings opportunities range of categories. These included: • To deliver substantial savings to the global facilities, marketing, legal, professional business services, HR services, recruiting, temporary labour and contractors, training • To improve the speed and and IT quality of service delivered by Procurement to the business • Multi-million pound annual savings objective achieved. The success of the approach led the BG Group to re-evaluate their procurement approach, electing to outsource all indirect category procurement to 4C • 4C and BG have worked closely together since 2002
  23. 23. Case studyMulti-million pound annual savings delivered Objectives Approach & Outcomes • To collect and analyse data and to identify • A flexible resource model was used to the changes required to implement the deliver a persuasive ROI for Catlin. This various savings programmes. This involved 4C flexing specialist resources process involved pulling together a large from a pool of experts in accordance with amount of information into a useable Catlin’s needs. database and helping to introduce a • Strong senior stakeholder engagement procurement function into the existing across the categories managed through corporate structure. highly credible category experts. • To identify key suppliers, contracts and • Significant annual savings across Audio categories for negotiation, as well as Conferencing and Mobile Telecoms. areas where value could be added and risks eliminated. • 13% annual saving achieved in HR spend including Management Training, Interim Agencies, Temp & Perm Recruitment Agencies and Reference Checking. • 16% annual savings in the FM category including Catering, Postage, M&E Consultancy and Office Move Project Management.
  24. 24. Case studySavings of more than £15m delivered Objectives Approach & Outcomes • To optimise B&Qs indirect purchasing • The procurement team delivered annual model. When the project was initiated, savings in excess of £15m, and a host of B&Qs indirect purchasing model was other benefits including: "decentralised and fragmented and • Dramatic increase in compliance to needed to be changed in order to ensure preferred/approved suppliers its potential was fully leveraged. • Indirect spend dashboards, communicating • To review all elements of the cost base to directly to the board and providing a summary of underpin the core value proposition and how B&Q invests its £1.18bn of indirect spend deliver commercial agility, value for money and spend control. • Internal procurement portal and other tools • To raise the profile of Procurement within • A ubiquitous end-to-end purchasing process B&Q. from Create a Category Strategy through to Managing the Vendor‘ • Dramatically improved procurement credibility • The new Procurement function was awarded the CIPS Award for Most Improved Procurement Operation.
  25. 25. Commercials – risk / reward optionsWe link our fees to performance and delivery High Risk / Reward • Up to 40% of fees at risk • Up to 40% performance Medium Risk / bonus Reward • Up to 20% of fees at risk • Up to 20% performance Fixed Fees bonus • Discounted fixed fee charged • Fixed fee based on during project expected workload and 4C • Fee adjustment paid (if any) resource costs once project completed and • 4C resources dependent savings have been signed off on spend and categories being reviewed
  26. 26. Testimonials Barry MellorIan Goldsmith Edward Fuchs Category Manager -Chief Operating Officer Group Procurement Director Marketing and SalesBrakes United Biscuits O2"4C proved an invaluable "4C have been working with UB "We have been delighted withresource for us and delivered since 2009 and have enabled a the support that 4C has givenhigh quality category planning, step change from procurement us in reviewing the marketinganalysis and project savings to delivering cost services category. Themanagement skills to the transformation. The team 4C knowledge and expertise hasBrakes team. 4C led from the put in place has over-delivered been clear from the start andfront, were enthusiastic and on all objectives and proved meant that they deliveredenergetic and played a key role themselves to be constant beyond expectations in termsin shedding light on an innovators; always looking for of supplier relationshipimportant part of our business. processes to optimise or management, relationshipI would not hesitate to leading edge technology to management betweenrecommend 4C." deploy. We are extremely marketing and procurement, pleased with the results increasing service levels whilst achieved and I wouldnt reducing costs and ultimately hesitate to recommend them." bringing savings to the bottom line." 26
  27. 27. TestimonialsPaul Jardine Roger Gonourie James HusseyGroup Chief Operating Former Head of Procurement MD Currency DivisionOfficer Catlin Group Limited B&Q De La Rue"4C helped us to identify "At B&Q, 4C worked as an "Id like to thank the 4C teammultiple cost saving integrated team with GNFR. for the on-going support youopportunities in our indirect The work that we did together are providing us with inspend by working with us in won the CIPS prize for "Most meeting our businessgathering and analysing our improved purchasing operation challenges. In the past fivespend data. Using this - start up". We have been years I have not worked with ainformation, 4C then delighted with their support procurement department thatimplemented quick win, over the last three years". has been so structured andmedium term and long term professional. The tools andsaving programmes for Catlin. processes are giving us a newWe are very happy with their visibility of spend and datainput and will continue to work allowing us to collaborate andwith them on future cost look at horizontal opportunitiestransformation projects." across the business." 27
  28. 28. TestimonialsPaul Bird Nigel HerringtonHead of Supply Chain Head of Procurement Tim PileAB World Foods BG Group Sainsburys Bank"I chose 4C Associates as they "BG has an integrated "4C have done a great job forpresented a practical project procurement outsource us, showing true understandingmanagement style with great relationship with 4C of the myriad complexitiesvisual monitoring tools and Outsourced Procurement involved within this category ofpersonnel that would fit in with Services for Indirect goods and spend. I wouldnt hesitate tothe project team at AB World services that adds significant recommend them."Foods. This proved to be a value to BGs business throughgood decision, as 4C gave the delivery of high classstrong leadership of our cross people, processes andfunctional team, regular techniques together withencouragement toward complementary consultingexcellent performance and services, that has led them tosound advice to achieve key being truly regarded as part ofmilestone targets. I would the team."have no hesitation in using 4Cfor future project support." 28
  29. 29. 4C AssociatesThe Kensington Centre66 Hammersmith Road London, W14 8UDWww.4cassociates.com