Case Study Background

The Daily Mail General Trust is comprised of six opertaing units: Associated Newspapers; Northcliffe Media; DMG Radio; DMG Information; Euromoney Institutional Investor PLC and DMG World Media.

Up to 2002 all operating companies made their own arrangements for the procurement of office supplies and associated products.

In January 2002, the procurement team of Associated Newspapers (ANL) chose to review their procurement practices in relation to office supplies as part of a wider savings drive.

ANL saw office supplies as a product area where they could make immediate savings.

The procurement team’s initial objectives were:

• Identify where, within the business, expenditure occurred
• Establish how many suppliers were being used
• Determine cost variance between suppliers
• Undertake a study into the feasibility of a single source supply solution and the potential savings.

From the initial investigations the following was established:

1. There were between 50 – 70 end users at the head office location and a further 224 (including NNG) end users at various locations around the country.
2. There were different 18 suppliers being used.
3. The cost variances between suppliers for the same or similar products were 5% to 25%.
4. It was feasible to provide a single source supply solution to all parts of the business as there were several office supplies companies with a nationwide delivery capability.
5. Initial investigations revealed that from contract award, full implementation could be anything from 4 to 6 weeks dependant on the supplier chosen.

As result of these findings the procurement team were further tasked to:

• Evaluate the market and identify the suppliers who could provide a nationwide procurement solution, would deliver the cost savings required and provide an above average service platform. Cost savings were targeted at 30%.
• Implement a branded web procurement solution across all users including full support and back up at a user level.
• Target, with the chosen supplier, an increase in average order values to ensure reduced process costs.
• Introduce, via the chosen supplier, a controlled procurement solution for all users to manage down costs whilst making available the products required.
• Provide on-line, real time management information.
• Ensure implementation within 4 weeks of contract award.
• Establish measurable savings within the first month of operation.

From initial consultations the team were able to arrive at a short list of suppliers who could deliver a nationwide procurement solution:

1. Lyreco
2. Oyez Straker
3. Corporate Express
4. Office Depot
5. UKOS plc.

These suppliers were invited to present their supply proposals to the Board of Associated Newspapers Group who stipulated the following issues should be covered:

• Organisational structure and stability
• Implementation processes and time frames.
• Account management.
• Cost and product control.
• How measurable savings would be delivered & maintained.
• Continuous improvement programme – robustness and sustainability.

Associated Newspapers group board were not simply seeking the cheapest supplier, but one which understood their specific needs and requirements. The successful supplier would need to gain confidence from all users within the business and deliver the corporate objective throughout the term of the contract.

The contract award

UKOS were awarded the contract and implementation started in April 2002 with full Implementation completed in June 2002.

The main reasons given for selecting UKOS plc were,

1. Delivery of direct product cost savings of in excess 30%
2. Demonstrated ability to deliver process cost savings
3. The adoption of a long term partnership mentality.
4. Provision of a national network of local account managers to support local users.
5. A single point of contact for all contractual matters.
6. Excellent management reporting capability.
7. Ultra reliable next day service nationwide.
8. Targeted 3 year continual savings plan.
9. ANL (DMGT) branded web solution with emphasis on individual ANL Company and end user needs.

Contract Success

A key feature of the continuous improvement programme is the monthly price review of the top 200 products used by ANL. This has had a major impact in terms of managing costs within the business.

UKOS plc conducts a monthly meeting with all key decision makers looking in particular at:

• Price of the top 200 product lines.
• Customer service and satisfaction at company and user level.
• Measurement of target set out in the Service Level Agreement.
• Detailed analysis of cost savings delivered, including process costs
• Web procurement initiatives.
• Innovations in products and services.

Current feed back from users and business managers shows a high level of confidence in this contract

Further Developments

As a result of the success UKOS plc has enjoyed with Associated Newspaper Group another major DMGT business, Northcliffe Newspaper Group (NNG), has joined the contract after completing a similar tender process. This tender processed reinforced UKOS solution as clearly the best available supply solution for DMGT companies..

NNG started to trade with UKOS plc in June 2006 with full implementation across all users being achieved within 6 weeks. In total NNG have some 65 locations and 241 users across the UK.

UKOS plc has utilised the current account management structure in place for ANL to provide further sales support for NNG.

To date all the following DMGT trading companies deal with UKOS plc. The total potential spend on office supplies across all trading companies for 2007 will be in excess of £1.8 million.

Daily Mail and General Trust PLC Testimonial

UKOS have been supplying stationery to Associated Newspapers and other DMGT Companies, for several years and last year the contract was extended to our sister company, Northcliffe Media Ltd.

Given that Northcliffe sites are located throughout England, it has been very impressive how UKOS have handled this large rollout with such minimal disruption.

Substantial cost savings are now being achieved across the Group thanks to the proactive approach UKOS are taking in managing the contract. I am also very pleased with the efficiency of electronic ordering through your website. This, coupled with the timely delivery of goods with a very low returns rate, is proving successful for all parties.

— Rick Kelsey, Group Purchasing Manager for Associated Newspapers

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