Oculus led and implemented a supply chain consolidation strategy for one of the UK’s largest insurance groups, who had just completed the acquisition of several organisations.
Our work delivered significant success to our client by way of up to 32% reduction in supply chain costs, and, significant increases in its sales margin.
In a market that is continually changing and evolving, the philosophy of our client is self-evident through their multi-award winning track record. A philosophy that aims to “provide a superior and professional service to customers and being committed to helping their 700 plus staff to achieve their goals and encourage them to be the best at what they do”.
Operating a range of market-leading insurance and claims management brands, our client had recently commenced an ambitious organic and acquisitive growth programme. They needed vital support in getting their supply chain match-fit, compliant with their regulatory obligations and ensuring they had sufficient scale and capability to support their growth ambitions.
- Create and deliver a group supply chain consolidation strategy.
- Leverage the buying power of the combined group to generate reductions in operating costs, and, improve product margin.
- Embed new ways of working to enable our client to effectively manage suppliers and supplier performance in future.
As with any engagement such as this, understanding the various pressures, parameters, objectives and aspirations are key. Both at the local/operational level and across the senior leadership team. Each stakeholder had their own individual needs, wants and pressures, so it was vital to establish efficient and clear decision-making protocols and programme management techniques, ensuring that progress continued and pragmatic decisions were made quickly.
Leading a series of category workshops that engaged with key stakeholders across the organisations went to secure the commitment to the programme, whilst providing a platform for all key stakeholders to make a positive contribution and share their experience. In combination, Oculus brought its depth of category knowledge to bear to help shape real-world and realisable opportunities.
Onward thereafter, gaining a deep and intrinsic understanding of the current supply chain. Key and strategic suppliers were engaged, along with a range of best-of-breed providers who could share their knowledge and experience.
A huge undertaking in itself, once supply chain strategies had been agreed, and the success criteria defined, we were to execute a series of comprehensive tenders and renegotiations, from sourcing through to final contract, and lastly, implementation.
Our objective was to ensure that the projects selected for review, reflected areas which would make the most significant impact for our client, while ensuring that any BAU activities were channelled into the cost reduction programme as appropriate, to ensure there were no missed opportunities.
Tactical opportunities were explored in often typical areas of transactional spend, whereas other sections of the supply chain represented areas of future growth and scaling of the organisation. Project sourcing strategies were set and executed accordingly.
The range of services that fell within the scope of the programme varied greatly, with some presented below;
- Ancillary and Add-On Insurance Products – a range of insurance products which represented a key area of client revenue.
- Operational Consumables – a leverage area; conventionally a source of big savings and quickly implementable opportunities.
- Postage, Direct Mail and Print – a key and highly strategic part of the marketing supply chain; its aim is to communicate with customers (and potential customers) in the most effective way possible.
- Utilities – an area of spend which was out of control; our client had never addressed this expenditure and leveraged its volumes, however, caution had to be exercised to balance value vs flexibility, given the wider business integration and potential for property disposals.
To further grow the challenges of the programme, mid-way through our engagement, our client announced the completion of the further acquisition of another large insurance broker, which saw our programme remit extend. Oculus was front and centre to the delivery of this strategy across the group, and the commitment of our team, and rigour in our processes, ensured this sudden upward swing in programme scale was absorbed without delay.
The engagement was a big success for our client. Significant reductions in operating costs were achieved, whilst providing our client with a stable of suppliers that will support their growth ambitions.
Some notable highlights of our programme;
Strategic reviews of print, operational consumables, postage, and direct mail which resulted in significant cost savings up to 32%, much-needed service improvements and the introduction of more capable suppliers into their business.
A total review of our client’s supply chain for ancillary/add-on insurance products. This review leveraged the client’s consolidated volumes with market-leading A-rated insurance underwriters and product providers.
A new energy management procurement strategy, seeing the consolidation of all property’s requirements under a single broker.