4C Associates

Delivering Cost Transformation

Insight, technology and experience

to drive rapid profit improvement

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Our offer

4C Associates specialises in improving the profit margins and valuations of organisations. Our business combines specialist Cost Transformation insight, expertise and cutting-edge technology 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.

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About us

Experience Our Team

Established 2000 65+ in-house talented specialists

Real Savings

£62.6 million saved for clients in 2011

Delivering

Business wide cost transformation

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Our experience

RetailLogistics Food & DrinkFinancial

Public SectorUtilities Other Sectors

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Our capabilities

• Detailed assessment of realistic savings

• Savings delivery roadmap and opportunity matrix

• Benchmark database

• Optimisation tools

• Best practice

• Sustainable, long-term benefits

• Talented functional experts

• Expert support functions

• Bespoke tools

• Locked in savings

• Managed services

• Tracking tools

Opportunity Identification

Benefits Delivery

On-going Cost Management

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Client delivery

ClientTarget

Savings£m

Actual Savings

£m

ROI%

Oil & Gas 25.0 32.0 27.0

FMCG 1.6 2.8 12.0

Financial Services 1.4 2.3 4.0


FMCG 2.2 2.6 2.0

Leisure 1.5 2.3 8.0

Retail 8.7 9.6 23.0


TOTAL 49.4 62.6 8.3

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Our tools - procurement

• Spend analysis by category, vendor, cost centre, etc.

• Dashboard Reporting

• Value plan weighting

• ROI summary

• Company profiles

• Industry reports

• News archives

• Benchmark data

• Specialist sector knowledge

• Specialist industry knowledge

• Strategy analysis

• Category planning

• Balanced scorecard

• Performance metrics

• Stakeholder feedback

• Reporting

• Databases

Cost Analysis & Benchmarking

Insight & Innovation

Process & Organisation Optimisation

Tracking & Monitoring

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Our tools – supply chain

• Tendering, including e-tendering

• Collaborative sourcing

• Insight & innovation

• Commercial & contract support

• Transition

• Implementation

• Audit & review

• CAST – supply chain optimisation

• CLASS – warehouse layout & design

• Paragon – network & transport optimisation

• Six Sigma / Lean

• Labour productivity

• Asset utilisation

• Operational processes

• Financial management & control

• Operational management & control

• Project planning

• Communication

• Monitoring

• Reporting

• Change control

• Post project review

• Risk identification

• Mitigation

• Contingency planning

• Business continuity and disaster recovery

Procurement StrategyOperational Excellence Project & Risk

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Functional expertise – Supply Chain & Logistics

Leading companies are using their supply chain and logistics capabilities to differentiate themselves from their competitors in various ways; improved availability of products leads to increased sales, lower inventories reduce working capital requirements and efficient logistics improves their operating margins.

Our experts work with clients to help 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 activity

Some challenges we typically find 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

Functional expertise – CAPEX Procurement

Capital Expenditure (CAPEX) focuses on the procurement of property, factories, fleet or equipment, or the development of an existing asset at a cost exceeding the minimum capitalisation threshold. Within most organisations, CAPEX procurement sits between direct and indirect procurement.


• 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 maintenance


• 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

Functional expertise – HR & Resourcing

Pricing is a typically complex and non-transparent area within HR and resourcing. This is true even in cases where detailed contracts are in place.


• 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 stakeholders


• 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

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Functional expertise – IT & Telecoms

IT and Telecoms are fast-moving areas in which category-specific procurement expertise adds tremendous value


• 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 spend


• 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

Functional expertise – Marketing

Marketing is one of the largest areas of cost for many companies, however, it is also an area where return on investment is particularly difficult to quantify.


• 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



• 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

Functional expertise – Mergers & Acquisitions

M&A activity is often one of the fastest ways to impact cost and a catalyst for transformation. The key element behind successful M&A activity is the creation of synergy between both companies. When two businesses join forces numerous opportunities arise, including more efficient use of resources, better economies of scale and increased market presence. A well carried out operation can lead to growth and increased profit.


• 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 diligence


• 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

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Functional expertise – MRO

Maintenance, repair, and operations (MRO) focuses on the procurement of engineering spare parts and site services for manufacturing equipment and production areas.


• 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 maintenance


• 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

Functional expertise – Office Services

Well-managed office services enable a business to operate efficiently and effectively, and can positively impact on productivity and morale. To those outside the business, including clients and potential employees, the quality of office services create the impression of the professionalism, creativity and culture of the business.


• 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 strategies


• 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

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Functional expertise – Professional Services

Professional services procurement is rarely about getting the lowest price. Most users - who are 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.


• 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 processes


• 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

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Functional expertise – Property & Facilities

Property and facilities service specifications are complex, and the costs of services are often not well defined or understood.


• 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


• Improve overall effectiveness of processes and latest technology


• 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

Functional expertise – Travel

Travel is a diverse category which tends to generate an emotional response from large numbers of individual users.


• 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


• Provide insightful travel spend reporting to empower travel decision making


• 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

Objectives• To work closely with AstraZeneca

purchasing teams to identify, quantify and plan specific category procurement improvement projects – focusing on achieving rapid and sustainable cost reduction

• To achieve substantial savings by providing specialist category expertise, sourcing methodologies and tools, research, benchmarks and market information, cost analysis and modelling capabilities, process change and change management expertise

• To transfer knowledge and skills back to the AZ purchasing teams

Approach & Outcomes• Exceeded substantial savings targets on

each of the category-specific savings delivery projects

• Developed and introduced new ways of working, implemented new purchasing processes, category knowledge bases and supporting tools to ensure savings are ‘locked in’ for future years

• Managed AZ procurement training programme to improve core skills

• 4C’s project work with AZ won the CIPS ‘Procurement Excellence’ award in 2007

• Reduced annual cost base by more than £20 million across Europe and the UK

More than £20 million annual savings delivered

Case study

Objectives• To manage £350m of spend and drive

cost reduction through strategic sourcing and demand management

• To drive significant improvements in Procurement’s engagement with key business stakeholders

• To drive compliance to preferred contracts in order to maximise realisation of negotiated savings to the bottom line

• To provide a flexible resource model for O2 to achieve rapid deployment of niche procurement expertise for projects as required

Approach & Outcomes• A 4C ‘quick-wins’ team achieved £500k of

negotiated savings within the first two months

• Category management teams were established and aligned to key spend categories (e.g. Logistics, Property & Facilities Management, HR and Professional Services)

• 4C implemented a Procurement Helpdesk dedicated to driving engagement with stakeholders across O2 and compliance to procurement processes and policies.

• In excess of £20m annual savings delivered

Annual savings of over £20 million delivered across Europe

Case study

Objectives• To conduct a comprehensive diagnostic

review of BG Group’s indirect spend, including spend analysis, interviews, process reviews and benchmarking to identify and quantify savings opportunities

• To deliver substantial savings to the global business

• To improve the speed andquality of service deliveredby Procurement to the business

Approach & Outcomes• 4C deployed a core team that was

supplemented by category experts as required through the projects

• 4C-led sourcing projects covering a wide range of categories. These included: facilities, marketing, legal, professional services, HR services, recruiting, temporary labour and contractors, training and IT

• 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

Multi-million pound annual savings across five continents

Case study

Objectives• To collect and analyse data and to identify

the changes required to implement the various savings programmes. This process involved pulling together a large amount of information into a useable database and helping to introduce a procurement function into the existing corporate structure.

• To identify key suppliers, contracts and categories for negotiation, as well as areas where value could be added and risks eliminated.

Approach & Outcomes• A flexible resource model was used to

deliver a persuasive ROI for Catlin. This involved 4C flexing specialist resources from a pool of experts in accordance with Catlin’s needs.

• Strong senior stakeholder engagement across the categories managed through highly credible category experts.

• Significant annual savings across Audio Conferencing and Mobile Telecoms.

• 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.

Multi-million pound annual savings delivered

Case study

Objectives• To optimise B&Q's indirect purchasing

model. When the project was initiated, B&Q's indirect purchasing model was "decentralised and fragmented' and needed to be changed in order to ensure its potential was fully leveraged.

• To review all elements of the cost base to underpin the core value proposition and deliver commercial agility, value for money and spend control.

• To raise the profile of Procurement within B&Q.

Approach & Outcomes• The procurement team delivered annual

savings in excess of £15m, and a host of other benefits including:

• Dramatic increase in compliance to preferred/approved suppliers

• Indirect spend dashboards, communicating directly to the board and providing a summary of how B&Q invests its £1.18bn of indirect spend

• Internal procurement portal and other tools

• A ubiquitous end-to-end purchasing process 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'.

Savings of more than £15m delivered

Case study

We link our fees to performance and delivery

Risk / Reward

Fixed Fees

• Fixed fee based on

expected workload and 4C

resource costs

• 4C resources dependent

on spend and categories

being reviewed

Medium Risk / Reward

• Up to 20% of fees at risk

• Up to 20% performance

bonus

High Risk / Reward

• Up to 40% of fees at risk

• Up to 40% performance

bonus

• Discounted fixed fee charged

during project

• Fee adjustment paid (if any)

once project completed and

savings have been signed off

Commercials – risk / reward options

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Testimonials

"4C proved an invaluable resource for us and delivered high quality category planning, analysis and project management skills to the Brakes team. 4C led from the front, were enthusiastic and energetic and played a key role in shedding light on an important part of our business. I would not hesitate to recommend 4C."

Ian GoldsmithChief Operating OfficerBrakes

Edward FuchsGroup Procurement DirectorUnited Biscuits

Barry MellorCategory Manager - Marketing and SalesO2

"We have been delighted with the support that 4C has given us in reviewing the marketing services category. The knowledge and expertise has been clear from the start and meant that they delivered beyond expectations in terms of supplier relationship management, relationship management between marketing and procurement, increasing service levels whilst reducing costs and ultimately bringing savings to the bottom line."

"4C have been working with UB since 2009 and have enabled a step change from procurement savings to delivering cost transformation. The team 4C put in place has over-delivered on all objectives and proved themselves to be constant innovators; always looking for processes to optimise or leading edge technology to deploy. We are extremely pleased with the results achieved and I wouldn't hesitate to recommend them."

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Testimonials

"4C helped us to identify multiple cost saving opportunities in our indirect spend by working with us in gathering and analysing our spend data. Using this information, 4C then implemented quick win, medium term and long term saving programmes for Catlin. We are very happy with their input and will continue to work with them on future cost transformation projects."

Paul JardineGroup Chief Operating Officer Catlin Group Limited

Roger Gonourie Former Head of ProcurementB&Q

James HusseyMD Currency DivisionDe La Rue

"I'd like to thank the 4C team for the on-going support you are providing us with in meeting our business challenges. In the past five years I have not worked with a procurement department that has been so structured and professional. The tools and processes are giving us a new visibility of spend and data allowing us to collaborate and look at horizontal opportunities across the business."

"At B&Q, 4C worked as an integrated team with GNFR. The work that we did together won the CIPS prize for "Most improved purchasing operation - start up". We have been delighted with their support over the last three years".

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Testimonials

"I chose 4C Associates as they presented a practical project management style with great visual monitoring tools and personnel that would fit in with the project team at AB World Foods. This proved to be a good decision, as 4C gave strong leadership of our cross functional team, regular encouragement toward excellent performance and sound advice to achieve key milestone targets. I would have no hesitation in using 4C for future project support."

Paul BirdHead of Supply ChainAB World Foods

Nigel Herrington Head of ProcurementBG Group

Tim PileSainsbury's Bank

"4C have done a great job for us, showing true understanding of the myriad complexities involved within this category of spend. I wouldn't hesitate to recommend them."

"BG has an integrated procurement outsource relationship with 4C Outsourced Procurement Services for Indirect goods and services that adds significant value to BG's business through the delivery of high class people, processes and techniques together with complementary consulting services, that has led them to being truly regarded as part of the team."

4C AssociatesThe Kensington Centre66 Hammersmith Road

London, W14 8UDWww.4cassociates.com

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4C Associates