Dukefield is the holding group for ten companies operating in the public and education sectors. Of these, Lancashire Purchasing Agency operates as sole purchasing agent for Lancashire County Council; the Northern Procurement Group acts as strategic procurement advisor to North Yorkshire County Council – both of these are effectively outsourcings of previously internal purchasing functions. Educational Supplies Direct.com serves the secondary school and higher education market, while Play, Learn and Grow supplies nursery and primary schools.
The companies operate as purchasing consortia, buying on behalf of different customer groups to maximise buying power and economies of scale and while services are marketed through the different brands to each customer sector, internal efficiencies are achieved through centralised sales desks, financial administration, purchasing, marketing, and other support services.
The four group companies have around 120 live contracts in place, covering the provision of some 30,000 different products and services sourced from more than 400 suppliers. Activities range from the central negotiation of contracts for fuel, power or telecoms services, to the supply of the very wide range of equipment, furniture and consumables used by local authorities, schools and colleges.
This business has traditionally been based on paper catalogues, although in line with government policy, e-procurement techniques are becoming increasingly important. Some deals give the Dukefield firms ‘sole supplier’ status, but for most general consumables the group has to show its worth in a highly competitive marketplace, placing a premium on effective service delivery.
The companies operate two distinct service channels – for around 2,500 typically fast-moving bulk supplies, the group orders on its own account from suppliers and operates a warehousing and logistics function. For the bulk of products, however, customer orders are passed to suppliers who then deliver direct to the customer location. A key system requirement, is for the system to identify which orders should generate a pick note against the warehouse, and which should raise a Purchase Order against a supplier.
Group marketing director Jon Chamberlain explains: “Around three years ago we really found that our existing systems were starting to creak; they weren’t going to be able to support further growth in the organisation, and in particular they didn’t have the facility to run multiple trading companies on the same platform as common back-office functions. We went to the marketplace to look for a flexible system that could grow and develop with us – we spent about 12 months looking at proposals, making site visits and trying to find examples of user companies that mirrored our situation. From a shortlist of three we chose a 32 user Sage 500 system.” That system was running on a new HP Windows 2000 server – previous systems ran on Unix.
One key factor, says Chamberlain, was Dukefield’s previous and happy relationship with Sage reseller Pinnacle. “Dealer support was important to us, and there was a certain comfort factor in dealing with the company and its individuals – we felt confident that they would be able to deliver on account management, back up, infrastructure and so on.”
Group IT manager James Rafferty adds that a conscious desire to have both hardware and software support under the same roof was also a big factor. The decision to go for Sage was made in September / October time, with a non-negotiable implementation date of April 1. Implementation, Chamberlain says, involved a lot of internal work to ensure that data existed in the correct formats, and the creation of a few special software patches to combine the warehoused and direct supply channels, but “apart from one minor and temporary glitch, the transition went as sweet as a nut – the product of a lot of good preplanning, input from Pinnacle and our own IT team, and a sound understanding of requirements and deadlines”.
Rafferty says: “Where we differ is in the profile of what and how we supply, with a very high percentage of product shipped direct from suppliers. Pinnacle have devised ‘patches’ so we can take a complex order for a range of products, which might be supplied from the warehouse or directly from a number of suppliers – depending not just on our stock situation, but on quantities, location, distribution costs and so on.
“Our telesales desk doesn’t have to know precisely how the product will be sourced; whether from our stock or by direct delivery. One of our most key suppliers can guarantee next day delivery on 18,000 products in our range, so to that extent the customer doesn’t need to know either. In that case, purchase orders raised by the system go via EDI to the supplier; for others we use autofax. Either way, our supplier will have the information only 20 minutes after we have taken the order”.
Rafferty says: “Often, we will have several elements of an order ready for immediate delivery while fulfilment of other parts may require a period of grace. Pinnacle has written a special piece of software which, within sensible limits, brings all these together to create a single invoice.”
Another challenge with which the Sage systyem has coped is the need by councils and schools for specific forms of line detail reporting – ‘subjective and objective coding’. As public sector procurement becomes ever more professional and sophisticated, Dukefield is sure that the Sage system will enable it to keep on top of customer needs and the demands for accountability.
Chamberlain concludes: “We are able now to run the group the way we want to. We have a very flexible system, excellent reporting functions – not just the usual daily, weekly, monthly management reports but the ability to carry out live interrogations, exception reporting effectively in real time; and we can gauge our performance at group level or at the level of the individual trading brand.” n