FAQs

Qs

1. What is ‘Non-core’ expenditure?
2. Why should we bother with Non-core?
3. Who are Procurement Management Ltd -- PML?
4. Who are Global Procurement Group -- GPG?
5. What is on offer? . . . What are the key benefits?
6. How long does it take?
7. Do we deal direct with the Suppliers?
8. Why should we change when we are happy with our existing suppliers?
9. What is the cost?
10. How does PML make money?
11. What’s in it for the Suppliers?
12. Do we have to deal with the nominated Suppliers?
13. Are there any formal contracts or agreements?
14. How can we be sure that Suppliers remain competitive?
15. What happens if we find a better offer elsewhere?
16. How do we get started?

Q1 - What is ‘Non-core’ expenditure?

• This is the spend on all of those items and services essential to the running of your business, but which are not core inputs to your main output.
• In accountancy terms these are the indirect costs.
• Whilst there will be some variance in what is ‘non-core’ from business to business, many are common across most industry sectors (the most noticeable difference being between manufacturing and service businesses)

Typical non-core examples...

Q2 - Why should we bother with Non-core?

• Whilst most businesses pay a great deal of attention to their core inputs, non-core is an area which, almost by definition, frequently escapes rigorous and systematic review, or where the review process is compromised by lack of time, resource and by lack of specific knowledge in the relevant sectors. The result is that the great majority of businesses are wasting significant amounts of money by not managing the non-core side.
  
  
• Whilst each individual category of non-core may not appear of great consequence, when combined together their cumulative cost is very often significantly more than most businesses realise. Taking all industry sectors, the average combined non-core spend is over 10% of sales revenue, and in some scenarios can even exceed 25%.
  
  
• What Procurement Management Ltd does is to introduce that missing level of control right across all of your non-core expenditure, delivering efficiencies and substantial savings in the process. PML will save your business money, that is assured, but we deliver very much more than just cost reduction.

Q3 - Who are Procurement Management Ltd -- PML?

• PML specialise in non-core procurement bringing efficiencies and savings to companies with sales turnovers of typically between £20m and £500m.
  
  
• Non-core is our core activity.
  
  
• Our specialism is in bringing excellence of supply, best practice and significant cost savings (many of which are guaranteed) to the arena of non-core procurement.
  
  
• The methodology we apply is refreshingly different. It has been developed by our affiliated company, Global Procurement Group, and enables us to deliver unparalleled commercial leverage in the field of non-core – leverage on both price and performance. There is no cost to the client, there is no contract tying clients in to us, and we deal with over thirty non-core supply categories.
  
  
• Whilst all well managed businesses pay a great deal of attention to their core inputs, very few businesses have either the time, the available resource or the expertise to apply the same level of diligence to non-core. This is where we come in -- this is our edge.

Q4 - Who are Global Procurement Group -- GPG?

• Global Procurement Group (GPG) is a specialist procurement organisation which focuses specifically on agreeing terms with selected suppliers of non-core products and services, and thereafter ensuring compliance on both price and performance criteria. Our company, Procurement Management Ltd, is one of over forty businesses affiliated to GPG which together are able to deliver benefits to both clients and suppliers. It is quite simply a win-win scenario.
  
  
• Via GPG and their proprietary methodology we have access to unparalleled commercial leverage on both price and performance.
  
  
• We work only with top-tier suppliers and, in partnership with GPG, we continually monitor, benchmark and review performance.

Q5 - What is on offer? . . . What are the key benefits?

1. Improve on the existing supply price.
   
   Many of the savings are guaranteed by virtue of pre-negotiated terms with our suppliers. For example, in a number of categories, irrespective of what you are currently paying, our suppliers will guarantee a rebated ‘loyalty’ saving of 10.5% which is on top of any other savings achieved in the process.
   
   
2. Loyalty rebates are credited to your account with immediate effect.
   
   
3. The surety of a ‘market watch’ to ensure that prices and performance remain competitive.
   
   
4. We provide the commercial comfort, perhaps for the very first time, that you are buying non-core items and services both efficiently and effectively, and without compromising on the quality of supply received.
   
   
5. It is an inevitable fact of commercial life that some suppliers of non-core take advantage of the fact that many businesses do not monitor, control or review their non-core side. This simply is not tolerated by the process methodology we apply.
   
   
6. There is no cost to you and there is no contractual commitment to Procurement Management Ltd.
   
   
7. It is a win-win situation – there is no down-side. You will save money (which goes straight to your bottom line or to business improvement / development budgets), quality of supply will not be compromised and is very often greatly improved, and the overall process of non-core procurement is rationalised, monitored, reviewed and controlled.

Q6 - How long does it take?

• Because many of the supply terms are pre-negotiated and guaranteed, implementation time in the majority of categories is as quick as you want it to be – in some cases this can be a matter of days.
  
  
• In instances where there is a supply contract which has some time to run, do not let this put you off as your new supplier may be interested in buying out the remaining portion of the contract.
  
  
• The first step is for us to gather information from you and for us to instruct the relevant suppliers to submit proposals specifically geared to your requirements. The timings will depend on the complexity of the situation and the supply categories of interest.

Q7 - Do we deal direct with the Suppliers?

• Yes... We do assist with the transition and implementation of your new suppliers, but having done that we do not believe that simply acting as an on-going middleman in the supply chain contributes any additional value to the process methodology we are delivering to you.
  
  
• Where we do add on-going value is to conduct review meetings with you on an agreed periodic basis so as to ensure that expectations on price and performance are being met and to make any appropriate adjustments. In essence we become your non-core procurement partner – our interests are completely aligned.
  
  
• In addition, and very importantly, we are continually working in the background in conjunction with Global Procurement Group... monitoring, assessing, market watching and benchmarking the supplier base to ensure that our proposition of best practice at best price, guaranteed savings in many categories, and overall excellence of supply is being achieved.

Q8 - Why should we change when we are happy with our existing suppliers?

• There are a number of key benefits (see Q5 above) but in essence . . . we will save you money, we will ensure that you are buying efficiently and effectively in the typically defocused and diverse arena of non-core procurement.
  
  
• It is not an all or nothing package – you choose which categories and when.
  
  
• We fully expect that some of your existing non-core suppliers will remain suppliers to you.
  
  
• The important thing at this stage is to ensure that you are not missing out on an opportunity . . . so let’s talk first so as you can arrive at a decision on a sound basis.

Q9 - What is the cost?

• There are no client costs at any stage of the process. It is as simple as that. We do not charge consultancy fees, nor is this some sort of ‘buying club’ with membership fees, nor is there any minimum spend criteria.

Q10 - How does PML make money?

• As with our clients, in many categories we receive a percentage rebate from the suppliers based on the rebate received by you.
  
  The most common formula is where a rebate of 15% is applied to the order value -- you receive 70% of this and the remaining 30% is divided between Global Procurement Group (10% of the rebate) and PML (20% of the rebate).
  
  If, as is often the case, your new supplier is able to supply you at lower prices than previously even before the rebate is taken into account, then that is your gain. The rebate in this scenario is applied subsequently and our reward is based only on the rebate figure.
  
  In those categories where a rebate is not the best way forward, we receive a commission from the supplier.
  
  Whether rebate or commission... it is always totally transparent.
  
  
• This is reassuring to our clients as our remuneration is effectively aligned and incentivised with their’s – if our clients don’t make savings then PML don’t earn fees!
  
  
• We’ll be happy to explain this in more detail when we meet.

Q11 - What’s in it for the Suppliers?

• The Supplier’s objective is to win good customers and then to ensure their ongoing loyalty through excellence of supply allied to exceptionally competitive prices and in many categories additional rebates.
  
  
• Via GPG and its network of affiliates such as ourselves, suppliers are able to pitch for a vast amount of new business with a very high success rate due to the process methodology we apply. This greatly lowers the average cost of winning new accounts. Also, on account of the applied methodology, customer retention rates are very much higher. It really is a win-win scenario... good for both customer and supplier.
  
  
• Again, as a direct result of the methodology, the need for tenders is greatly reduced which saves time, uncertainty, and cost for suppliers... and without prejudicing your, the customer’s, commercial position.

Q12 - Do we have to deal with the nominated supplier for all our needs in that supplier’s category?

• No, you do not. It is entirely at your discretion. But what needs to be kept at top of mind is that the more you direct to the nominated supplier the more you will save.

Q13 - Are there any formal contracts or agreements?

• All clients receive a formal offer of engagement for the purposes of clarity, as a letter of understanding, and as a non-disclosure agreement to protect Global Procurement Group’s intellectual interests. It is not a contract binding clients in to either Procurement Management Ltd or Global Procurement Group.
  
  
• For the majority of categories there is no contract tying clients in beyond one month’s notice of discontinuing supply and the typical commercial terms and conditions of supply and payment.
  
  
• For those categories falling within the governance of the Financial Services Authority, then the laws of the land obviously apply.
  
  
• For a number of categories, contractual agreements between client and supplier will be necessary. Typical examples include the provision of telecoms services, mobile phones, electricity and gas.

Q14 - How can we be sure that Suppliers remain competitive?

• This is an important part of our on-going input. In conjunction with Global Procurement Group regular benchmarking exercises are conducted. In addition our supplier base is fully aware that we monitor the markets in which they operate. It is very important that we ensure that our supplier base does remain competitive as this is a fundamental part of our service promise to our clients. As we are one of over forty affiliated businesses within the Global Procurement Group network there is a large amount of market data input to GPG’s market-watch centre with the result that if a supplier is not maintaining their competitive position it becomes clear very quickly and we are able to ‘encourage’ the necessary adjustments for the benefit of our client base.
  
  
• It is also worth noting that only top-tier suppliers are invited to participate in the select group of suppliers which comprise the supplier base. As such it is made quite clear that their commercial ethics are expected to match their market profile... but we do watch and monitor just to make sure.

Q15 - What happens if we find a cheaper offer elsewhere?

• First, let us know, so as we may respond appropriately. It is important to understand that we are delivering very much more than just cost reduction, albeit this is an important element. It is in nobody’s longer term interests to be drawn into a ‘dutch’ auction, neither customer nor supplier, and our proposition is based on best practice and excellence of supply at best price... and best price is not necessarily the very cheapest price that can be achieved... there will always be a cheaper deal to what was the previous cheapest deal... we all know this... but this will not be accompanied by best practice and excellence of supply and may even involve some dubious ethics!

Q16 – How do we get started...

• Call us on 01505 333520 and we will take it from there... we look forward to speaking with you!