Welcome to The Source, your quarterly

Newsletter from SDEA covering the wide range

of SDEA EeziBuy services now available to SDEA

members.

One of the biggest challenges facing businesses

is how to optimally allocate scarce resources

especially time, money and manpower. The

nature of the problem is exemplified by the

difficulties that can be met when attempting to

control and contain overhead costs - those

indirect costs that are necessary to our

businesses, but are not in themselves revenue

generating.

Selecting, changing and re-negotiating with

overhead suppliers, comparing specs, prices,

tariffs and service and continuously checking

price hikes, while being a necessary evil, can be

very unproductive exercises when management

time, effort and hassle are taken into

consideration. The problem is that such

activities deflect you away from what you do

best - running your core business. This is why

overhead management is often neglected,

frequently conducted poorly and, sometimes,

practically ignored completely. Which means

you can not only be paying over the odds but

receiving poor service and inferior quality.

The SDEA is aware of how easy it is for

companies to get locked into sub-optimal

supply sources and have teamed up with

PartnerSave to offer the SDEA EeziBuy

overhead procurement solution. This offers an

expanding range of competitive overhead

services from reputable suppliers and should

make the choice of a good, reliable vendor

much quicker and easier than before. Take a

look at the categories on offer; it’s a completely

free of charge service to all members.

And, of course, once you’ve tried it we welcome

your feedback.

When it comes to controlling overhead expenditure companies tend to do one of two things:

They either put their head in the sand and avoid doing it for as long as possible because of the

difficulties and aggravation involved, or they roll up their sleeves and quickly find themselves hopeless-

ly enmeshed in unproductive discussions, tedious ‘beauty parades’ and endless bargaining. In the case

of the latter, research has shown that small and medium-sized companies

spend a disproportionate amount of time and effort sourcing non-reve-

nue generating goods and services. This is the time and money spent on

things that, while they may be absolutely necessary (we all need electricity

and telephones for example), are totally non-revenue generating.

To put it another way, a company cannot afford to employ scarce

executive time on its secondary outgoings when this comes at

the expense of more profitable and more stimulating business-

creating activities.

One of the consequences of this is that, when it comes to indi-

rect overhead expenditures, most companies fall into the classic

‘procurement inertia’ trap where they stick with sub-optimal

suppliers on the basis of irrational logic such as ‘better the devil

you know’, ‘I’ll get around to it shortly’ and ‘overheads are not

really worth bothering about’.

And yet indirect overheads can easily account for 40% or more of a business’s overall costs. SDEA

EeziBuy from PartnerSave provides an answer - a quick, hassle-free route to great suppliers, great deals

and greater profits!

The SourceYour EeziBuy Newsletter from the SDEA

Overheads may be a necessary evil but you don’t have to dance with the

devil!

- your business convenience store

SEE OUR LATEST DEALS ON TELECOMS SEE

The SDEA has teamed up with PartnerSave to

provide you with access to the EeziBuy

procurement solution especially designed for

trade associations members.

SDEA EeziBuy offers a wide and expanding, range

of overhead categories negotiated with a network

of ‘best-in-class’ providers making supplier

selection easy, simplifying transactions and giving

some of the best deals in the market.

The SDEA EeziBuy pre-defined universe of

specialist suppliers have been partnered on

account of their competitiveness, commitment to

quality and standard of service.

Access to EeziBuy is from the SDEA website via a

password-controlled web portal which serves as a

‘picking area’ for services required. It is completely

free of charge to all paid-up SDEA

members.

- the new overheads procurement service - the new overheads procurement service - the new overheads procurement service - the new overheads procurement service for members of the SDEAfor members of the SDEAfor members of the SDEAfor members of the SDEA

Lawrence

Overheads

Direct Costs incl. Labour

48%

52%

85%

15%

Origin of costs

Overhead costs do not receive proportional management attention

WHY YOU MAY NOT BE IN CONTROL OF YOUR OVERHEAD COSTS…WHY YOU MAY NOT BE IN CONTROL OF YOUR OVERHEAD COSTS…WHY YOU MAY NOT BE IN CONTROL OF YOUR OVERHEAD COSTS…WHY YOU MAY NOT BE IN CONTROL OF YOUR OVERHEAD COSTS…

1. You don’t have the time

- it’s easy to find better things to do with your precious time than chase

around trying to cut a better deal on your peripheral expenditures.

Constantly monitoring and adjusting your non-core services

takes a disproportionate amount of your time.

2. You don’t spend much on overheads and your

expenditure is fragmented

- your expenditure is almost certainly fragmented,

which is a problem in itself - a raft of individual

costs soon add up to a considerable whole. Your

overhead outgoings are probably costing you a

lot more than you realise.

3. You don’t have the expertise

- companies tend to be experts in the procurement of their core,

income-generating goods and services, but rarely do they have any-

thing like comparable category expertise, negotiating skills or bargain-

ing power in their peripheral spend areas. Most of your overheads

costs are in highly specialised areas - insurances, telecoms, energy

etc. - you are hardly likely to have the knowledge and understanding

of these that you have in your core business. This means your

suppliers have the whip hand when it comes to negotiating rates.

4. You don’t relish the ‘nuisance factor’ of change

- running around identifying suppliers, constantly chasing ‘deals’,

switching contracts and sorting out problems is not many people’s

idea of a fun day. The sheer hassle and aggravation involved in

change is why ‘Better the devil you know’ and ‘let sleeping dogs

lie’ may well be your watchwords when it comes to overhead

expenditure.

5. You think you already have the best

deals available

- well you would say that, wouldn’t you!

But have you? The trouble is it can take a

lot of effort to find out. Effort that you may well

judge could be better spent on other, more pressing,

business priorities.

6. You find it difficult to change suppliers

- secondary suppliers are notoriously difficult to identify, compare,

assess and manage. This means changing them can be an extremely

haphazard exercise. And of course, suppliers of non-core goods and

services are masters at using contractual lock-ins, automatic roll-

overs, covert buyer incentives, and spurious ‘deals’ to perpetuate

business which is often not at the most competitive terms available.

Understanding your costs in terms of the relationship between fixed and

variable (controllable) costs is vital to successful overheads manage-

ment.

But the reality is that, in practice, management doesn’t understand this

relationship very well and almost invariably spends its time governing its

more ‘visible’ direct outlays such as labour costs and materials.

Yet overhead costs for a typical UK business have been on the rise for

years particularly in the service sector. These days’ indirect overhead

costs can easily account for upwards of 40% of an organisation’s

outgoings.

Understanding your costsUnderstanding your costsUnderstanding your costsUnderstanding your costs Management attention

www.sdea.eezibuy.co.uk

You will probably have received your personal password details directly

from SDEA. But if not, simply register on-line on the SDEA EeziBuy web

portal at www.SDEA.eezibuy.co.uk which can be reached direct or from a

link on the SDEA website.

Using the SDEA EeziBuy portal is simplicity itself - simply log in and look for

the category(s) you require then make direct contact with the SDEA EeziBuy

Supply Partner(s) via the links shown - phone, e-mail and website.

And when you make contact make sure that you mention that you are an

SDEA EeziBuy customer.

Please keep us informed of your buying experiences, good and bad via the

EeziBak feedback system - so that we can continuously improve the services

and prices on offer. And if you cannot find what you are looking for, just let

us know - we are continuously adding new categories to the SDEA EeziBuy

programme.

How do I access SDEA ? How do I access SDEA ? How do I access SDEA ? How do I access SDEA ?

Google?

A typical ‘Google’ search for ‘telecoms’, ‘packaging’ or ‘office supplies’

will return upwards of 100 million entries (try

it). The apparent convenience of instant ac-

cess to ‘millions’ of suppliers soon fades

when it comes to actually selecting and comparing. So Google be-

comes just the start rather than the end of your problems.

What about price comparison websites?

Well these may be fine for consumers but are of

limited use for business customers where value,

service and quality factors come into play. Price

comparison websites are by no means as impartial

as they might appear, often skew or fudge the

results to increase their appeal and are only as

good as the database and data-feeds to which

they are attached. And by parting with your per-

sonal information you stand the risk of being forever harangued by

spam....

OK, then I’ll use a ‘cost reduction’ expert.

This can certainly unearth good savings but at

a heavy cost. A typical cost reduction

organisation will tie you into a contract for 2

years or more and will charge you as much as

50% of the savings it realises over this period.

So you only get half the savings achieved, you

inevitably lose a degree of control over your

expenditure and you have to spend time, and share sensitive

information, with an outside party.

Using SDEA EeziBuy Supply Partners you will immediately bene-

fit from the following:

1. Immediate access to a ‘best-of-breed’ band of leading national

Supply Partners that are committed to quality and service.

2. Competitive prices and exclusive deals

for SDEA members.

3. Professionally-negotiated deals

with reputable suppliers all offering

a nationwide service.

4. Easy account applications and

simplified transactions.

5. An absolutely free service - no

up-front fees, no ongoing subscrip-

tions, no commitments to buy, no

minimum buying levels.

categoriescategoriescategoriescategories

Business Compliancy:

Fire Safety and Compliance

Business Print:

Offset Printing

Digital Printing

Screen Printing

Employee Benefits:

Specialist Employee Benefits

Private Medical Insurance

Energy Management:

Gas

Electricity

Financial Services:

Foreign Exchange

Merchant Card Services

E-commerce Solutions

Invoice Financing

Furniture & Fittings:

Office Furniture

Human Resources:

Payroll Services

Hygiene & Safety:

PPE Workwear

Janitorial Supplies

Health Insurance

Office Supplies

Office Products

Computer/Printer Consumables

Stationery

Packaging

Protective Materials

Systems and Machinery

Telecoms:

Landlines

Mobiles

Broadband

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Some of the benefits…Some of the benefits…Some of the benefits…Some of the benefits…

What are the alternatives?What are the alternatives?What are the alternatives?What are the alternatives?

Currently the SDEA EeziBuy programme offers the following categories. More

categories will be added soon and if there is a category you would particularly

like to see then please let us know.

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www.sdea.eezibuy.co.uk

For many businesses it is economically im-practical to throw large amounts of expensive resource into the sourcing and negotiating of dozens of overhead categories. One of the problems is that the procurement of ancillary goods and services, which by definition do not have a directly revenue-generating function, is

often treated as a business distraction and is invariably plagued by what has been

termed ‘buyer inertia’.

It can be difficult and time-consuming to be

constantly seeking the best suppliers with the best

deals and the consequence is that much of this class of sourcing is

done on the basis of ‘conven-ience’ and ‘indifference’ rather

than on a rigorous, professional ap-proach. And, while some of these

spends may be considerable, many are rela-tively small and may not be deemed to justify a huge expenditure of time and effort to im-prove.

Nevertheless, such small spends whilst individually insignificant, soon mount up. In a typical company these small spends, ranging from a few hundred pounds to thousands of pounds annually, can in total, easily exceed the sums spent on ‘strategic overhead spends.’

To successfully address these overhead spends, we need to borrow from the supplier-collaborative approach pioneered originally by the Ford Motor company but more recently by the Japanese automotive giants. This is the partnering concept sometimes referred to as ‘Toyotism’, a reference to the com-pany that rose to become the world's largest car manufacturer through the rigorous pursuit of such principles.

OK, so what can we learn from the ‘Big Boys’ when it comes to smart procurement? Essentially, the process of efficient procurement, especially for smaller companies, can be greatly improved through a

combination of aggregated spending, sound IT platforms and collaborative working with suppliers.

But before we look at how the SDEA EeziBuy programme achieves this in practice, let’s look at what an SME really needs when it comes to efficient procurement.

Research by Partner-Save showed that busi-ness managers and buyers, don’t just want

'the lowest' unit price. In a dynamic purchas-ing environment there is no such thing as a 'lowest price'. There is only a lowest price at a given point in time. What SMEs want is trusted sources, recognised brands, highly competi-tive prices over the long term, low transactional costs and ease of purchase. All of which, taken together, equates to the low-est Actual Total Cost (ATC).

The ATC is the ‘real’ cost of something, when you factor in prime cost, time to purchase, time to delivery, transactional costs such as credit terms, and the ‘aggravation factor’ invariably in-volved with irregular and smaller purchases.

A low ATC is what the SDEA EeziBuy pro-curement programme from PartnerSave of-

fers to all SDEA members. An array of first-rate suppliers cov-ering a wide assortment of buy-ing categories is provided through a web portal accessed directly through the SDEA website. These procurement deals are with established na-tional suppliers and they place huge aggregated buying power into the hands of individual companies.

And it isn’t just the buying power of the SDEA membership. It includes the huge buying pow-er of all the associations that are part of the PartnerSave Master Affinity Programme. The PartnerSave Supply Partners are selected on account of their competitiveness, their partnering credentials, their commitment to quality and continuous improvement, their geographic reach and, of course, their reputation.

The advantage of this is that, even where you are an SME or where you are not spending large sums on a particular category, with SDEA EeziBuy you still have direct access to strategic supplier relationships. SDEA Eezi-Buy provides the collaborative 'glue' which creates the necessary environment of mutual trust, shared goals, and spirit of co-operation in which a professional aggregated buying programme can flourish. With these deep, collaborative relationships in place for your overhead spends you can then focus your time, effort and buying expertise on your core business i.e. the revenue-generating activities that your business is all about.

Access to the SDEA EeziBuy procurement programme is absolutely free of charge to all SDEA members and there are no overall min-imum spend levels. Transactional costs and aggravation are minimised by a streamlined procurement process which includes a single account application which covers virtually all the programme suppliers.

Is your business bogged down by

unnecessary overhead costs?

Supplier partnerships have been

shown to be significantly better for re-

ducing costs and maintaining quality

and service over the long-term than

continuous competitive tendering The SDEA Eezibuy portal from

PartnerSave is your gateway to

partnered suppliers, easier buying

and better deals

For further details contact:

SDEA Tel: 01883 348911 / Email: enquiries@sdea.co.uk

orPartnerSave Tel: 01524 782830 / Email: SDEA@partnersave.co.uk

Your EeziBuy Newsletter from the SDEA

- your one-stop-shop for business overheads- your one-stop-shop for business overheads- your one-stop-shop for business overheads- your one-stop-shop for business overheads

EeziBuy has been designed

to not only reduce prime

costs, but also to reduce

the ‘aggravation factor’ of

procuring with small

spends.

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The Source www.sdea.eezibuy.co.uk