Case for Change

BTL is often asked to build a “case for change” for customers.  A case for change is a first step, it aligns Data Signals with Customer Signals and Industry SignalsIgnoring any of these diminishes or reduces the value of possible outcomes.

 

In building a case for change, which is something BTL does with new customers, we:

  • Collect and review Data, Customer and Industry signals
  • Ensure customer buy-in
  • Engage manufacturers and customers in a dialogue to explore the value possibilities of manufacturers programs
  • Work with executives to establish value drivers of a contract, (governance, metrics, continuous improvement, communication strategies, etc.)

 

The purpose is to “baseline” what is currently being done in the areas of product selection/usage, costs, control and reporting.  From this baseline, customers, purchasing, manufacturers and BTL can easily see what benefits are possible and how to achieve them.  Gaining “buy-in” from all levels reduces the perceived risk and increases the outcome because everybody knows what is expected – hence our “case for change.”

 

While not all customers require this initially, it is an important tool for measuring and communicating the success of the changes.  For example, purchasing can tangibly show an agency or school district their specific benefits through the “Key Success Factors” reporting incorporated in BTL contracts.  Note: these are vastly superior to typical styled “book reports” because BTL’s reports can be used to communicate progress.

 

“As head of purchasing, I know the level of frustration when we can’t communicate our value to others.  They just don’t trust what they can’t see.”

~ Head of State Procurement

 

BTL has found that most customers share Common Supply Chain issues.

Through the vast analysis conducted for an extensive variety of customers, BTL has found that most customers share Common Supply Chain issues.

 

Typical Areas Identified for Improvement in Costs, Processes & Service Levels:

Administration

  • Costs
    • Thousands of purchase orders placed to order same products multiple times
  • Compliances and Audit
    • Current contracts do not include requirements for vendor audit support

Contract Effectiveness

  • The lack of a well-constructed, flexible contract (tool) cannot meet the needs of a wide-range of users, limiting benefits and creating an atmosphere for under-utilization

Pricing Transparency

  • Incentives not disclosed create questions about “customer best interest”

Vendor Accountability

  • Contractual goals and metrics are necessary to measure performance and compare value across vendors selection process

Optimal Product and Process Selection

  • Manufactures have very good programs and products that are typically not optimized by distributor salespeople

Typical “Outcomes”

By helping our customers analyze and address these Common Supply Chain Issues, BTL provides an improved contract model that increases procurement efficiency and effectiveness, while reducing costs.

 

Typical “Outcomes”:

Direct

  • 3-5 % reduction in “Net Product Cost”
  • 40-65% reduction in order and inventory management costs
    • 80 – 85% reduction in orders processed
    • 30 – 50% reduction in labor costs to receive orders, but with higher customer service levels
    • Elimination of cancelled, split or back-orders
    • 10 – 70% reduction in on-hand inventory
    • Elimination of “static” or “expired” inventory

 

Indirect, but tangible

  • Improved contract compliance
  • Expanded use of provided tools
  • Cleaner facilities, reducing healthcare and accident costs
  • Greater visibility into spend management and contract management Key Success Factors