Speakers: Rich Dale and Mark Wood
[0:01] Rich Dale: Hello folks and welcome back to the latest episode of the Made to Grow podcast. I’m delighted this time around to welcome Mark Wood from Alliance Procurement Solutions. Hi Mark.
[0:14] Mark Wood: Hi Rich, how are you doing?
[0:17] Rich Dale: Thanks very much for joining us. We had a great conversation yesterday in the run up to this episode, so I’m really excited to share with the listeners your insights and experience around how you can help SME manufacturers make more from what they’ve got, really, and build resilience into their supply chains and processes. But could you tell the folks a bit more about yourself and what you do at Alliance Procurement Solutions?
[0:54] Mark Wood: Yeah. Hi everyone. So Mark Wood, Managing Director at Alliance Procurement Solutions. APS, I think, just keeps it less of a tongue twister. So I had a 20-year history at Rolls-Royce and set up Alliance Procurement Solutions seven or eight years ago now, and we work with manufacturing SMEs on their supply chain as a consultancy and procurement activities. But we also then do some work on business intelligence and data analytics as well.
[1:27] Mark Wood: So all in all, what we’re trying to do is give people better data clarity to make better decisions and improve clarity on their processes and their data, increase profitability, productivity and embed sustainability into their business and supply chains as well.
[1:50] Rich Dale: Brilliant. I mean, it’s the kind of thing that sounds like a no brainer, but we know that SMEs in particular have obviously the day-to-day pressures and, you know, promises to keep and who knows what’s coming around the corner from on high or from internationally, you know. But what do you look for in a business or in an SME, in terms of the receptiveness to what you do?
[2:26] Mark Wood: Yeah, I think that’s a really important part of it. So it’s really easy to say to people, we can save you X, or we could do X, Y and Z for you. But invariably people are really busy with their day-to-day jobs and very operationally focused, both in terms of the leaders and owners of the business, but also their teams as well. So I think it’s really important when we start to engage with people to understand what their appetite for change is as well.
[2:57] Mark Wood: Having that sponsorship within the business and having those close relationships with the leaders in the business is really important, quite frankly. It makes our job really difficult to be able to take people onto the next level, make the improvements, if we haven’t got that sponsorship within the business. The key part of that is actually we always start working with the business leaders first and foremost to understand what are the key drivers and what they’re trying to achieve. That’s an important foundation.
[3:28] Rich Dale: I think you’re right. I mean there’s parallels with what we do in the digital transformation side of things where sometimes you find companies are maybe looking for a silver bullet to their problems rather than having a clear picture of where they want to go to. Never mind then having an agreement internally, whether it’s at leadership level or throughout the business, what are the things that are going to get us there or what are the things that are going to hold us back?
[3:57] Rich Dale: Yeah, so that appetite for change is really kind of the door opener. If it’s not there, you’re fighting an uphill battle, I suppose.
[4:11] Mark Wood: Yeah, exactly. I think, as business owners and leaders, a few people would probably be lying if they didn’t worry about profitability and their cash flow, meeting customer demand, the people issues that come with that, all of those are inherent issues that people are fighting on a day-to-day basis. So it’s understanding that and the culture within the business is key.
[4:37] Mark Wood: But one of the things we do tend to find is, I don’t like the word consultants because it’s sort of, well, here’s a nice fancy piece of paper that tells you what you already know. It’s really not about that. It’s more about where are the key gaps and where can we help, and providing that additional resource to help people get onto the next stage and make those improvements.
[4:57] Mark Wood: And by working closely then with the teams, providing that coaching and our knowledge to help people be less operational and more strategic, and adding more value to the business, is where we get more joy.
[5:15] Rich Dale: Yeah, but I suppose it’s probably about proving the concept as well, you know. Not that people are necessarily sceptical about where you can save money, but again, sometimes, you know, with things that they can’t put their hand on, like scrappage or downtime or whatever. It’s hard to equate that to the pounds, shillings and pence that they’re losing.
[5:44] Rich Dale: What kind of low-hanging fruit or quick wins do you tend to find in a business that you can progress from?
[5:55] Mark Wood: I think a lot of it comes down to getting down into data first and foremost and understanding what’s happening in the data. Can we just pause that? Because I thought I’d turn my email off and it’s going like the clappers in the background.
[6:11] Rich Dale: That’s okay, I can’t hear it anyway.
[6:13] Mark Wood: But yeah, it’s just disturbing. Emails are peeking through.
[6:18] Rich Dale: Yeah.
[6:22] Mark Wood: I thought I knew that was going to happen so I’ll just turn it off. And it’s kicked itself back into life annoyingly.
[6:28] Rich Dale: So would you want to just start again? Yeah, as if I’ve just asked that question about the…
[6:33] Mark Wood: Yeah, absolutely.
[6:34] Rich Dale: …fruit. Yeah, and just jump back in there.
[6:37] Mark Wood: Yep. Okay. So yeah, I think the low-hanging fruit that we tend to look for really all comes down to that data, which is why data is really important to any business, and looking for those simple opportunities. So from a procurement point of view it might even be, how many orders are we raising on the supplier or in the supply chain? Is it excessive? Are we drowning in that? And other opportunities to maybe do something different. Have we got areas where we can see costs have increased significantly as well?
[7:13] Mark Wood: Just really understanding some of those dynamics helps you understand where those opportunities are. Again, that could be finance, it could be sales data, it could be anything really. It all comes down to the data and identifying those opportunities.
[7:30] Rich Dale: And do you find, is that enough then for people to be able to take action? Because I know sometimes in our world we can demonstrate supplier costs or delivery performance, therefore the information is there and staring the procurement person or finance person or MD or whatever in the face. But it still doesn’t necessarily mean they have the motivation to do anything about it, down to those pressures that you mentioned earlier.
[8:05] Mark Wood: Yeah.
[8:06] Rich Dale: So how do you then get that into action? How do you get them to see the value, take action?
[8:13] Mark Wood: Well there’s a couple of bits that sit behind that. Ultimately you’ve got to, well what is that? What is the business case for doing that? And sometimes what you tend to find is, oh, I didn’t really appreciate that, because you’re going to a micro level of detailed analysis and then, okay, that’s fine. But now what do I do? Well we can do X, Y and Z. And historically then when we can look back at our case studies, where last year we saved over 15% on average with supply chain costs.
[8:47] Mark Wood: And from a business reporting analytics perspective, we’re also working with a company where just one small business, they’re saving over 200 hours a year just on reporting and understanding their budgeting process. And it makes it a lot easier, less error prone. So it’s articulating those benefits. And again, you have to line that back into business processes and business objectives to make sure that you’re fully aligned and meeting the business KPIs. And that’s why that stakeholder engagement upfront is really important, because we can align everything back to those business challenges.
[9:33] Rich Dale: That’s a really important point actually around the business processes, because I think sometimes, you know, the particular scenario, whether it’s an opportunity to improve price performance or whatever it might be, or that’s a great example of saving hundreds of hours purely in reporting, you know. That inertia of pulling data together to the extent that you actually trust it.
[10:02] Rich Dale: We’ve had customers in the past say, you know, I spend so much time trying to get a reliable picture of my current status that by the time I’ve done it, I’m burnt out and I don’t have the brain space to actually then look for the insights that I want in the first place.
[10:17] Rich Dale: Yeah, but the point you made about the process is really key because I think, you know, when you’re in the middle of an issue, if you don’t step back and look at the process that that is part of, and have a process and continuous improvement mindset, then it’s hard to see how that value can be sustained or how that behaviour can be changed. So yeah, that’s really important.
[10:49] Mark Wood: There’s another really good case study where we’re working with a company at the minute where they’ve been struggling with some of their stocking levels that have to be aligned to meet customer demand. And so their supply chain is critical to their business. Their buying team, one of the buyers, so this wasn’t even coming from the leadership. One of the buying team turned around and said, it used to take me all day just to analyse one supplier on the stocking levels.
[11:22] Mark Wood: I can now do the whole lot in two hours. Now if you did that out on a shop floor on the machine tool, you’d save literally thousands of hours worth of process improvement. People have been really, really excited and happy about that, but we don’t seem to view it as something that’s sexy when it comes down to some of our back-office processes and some of the key things that are fundamental to the performance of the business.
[11:49] Mark Wood: So no, I think that’s one of the challenges that you have, is how do we understand that that is a real value-added activity. And for that buyer, what it means for them is now that they can focus on, can I improve my supplier relationships, being the best customer that I possibly can be, and reducing costs and a significant amount of cost, and optimising my cash flow at the same time. That is pure, tangible benefit. Why wouldn’t you want to do it? But it’s not sexy.
[12:24] Rich Dale: It’s not sexy. And as you say, it’s sort of invisible as well, you know. So, yes, I’m paying a salary, I’ve got a fixed cost, if you like, for a resource. They work hard, they’re a good part of the team. But are we analysing how they work? Are we giving them the right tools to work to the best of their ability? I mean, for me, it just comes down to allowing people to have fun during their day and feel like they’ve accomplished something.
[12:56] Mark Wood: Yeah.
[12:56] Rich Dale: So, you know, that’s a great example of somebody who will bounce into work thinking, I can make a difference today, rather than how I’m going to spend most of my time trawling through spreadsheets to try and figure out what I’m actually looking for.
[13:12] Mark Wood: Yeah. And, well, I think that’s a really good example of our role. It isn’t to take over people’s jobs and make them look bad. What we’re trying to do is, how can we make your job even more exciting? Would you rather come into work in the morning and think, oh God no, I know I’ve got to raise a couple of hundred purchase orders this week and I’ve got to sit there and just press all those buttons, or do I want to spend time just thinking, how can I improve profitability, cash flow within the business, and how can I make sure that my suppliers are working with me? That, to me, feels like a more rewarding job.
[13:29] Mark Wood: So if we give people those tools to express themselves. Now I’m a big football man. We often talk about Sir Alex Ferguson very recently I’ve seen, talking about soldiers and an artist. You know, actually, can we do the soldier work in the background to enable people to go and express themselves in their job? And that, I think, is what we’re trying to achieve.
[14:12] Rich Dale: 100. Not only from that job satisfaction point of view, but I think from the point of view of the workforce shrinking. You know, we need to be able to enable our people to do more with their time and not get burnt out.
[14:30] Mark Wood: Absolutely.
[14:33] Rich Dale: I mean, you hit on an interesting point there about making people look good. Do you come up against misconceptions about what you do, in terms of people fearing for their jobs or thinking you’re going to make them look bad, or whatever? What kind of misunderstandings do people have about the kind of work that you do?
[14:57] Mark Wood: Yeah, I think there is definitely that perception at times. It’s really not about that. You know, in the past, I’ve done most of those jobs, so I understand the pain, I understand how to make it better, understand how to make that job more rewarding and take away the stress levels that people have. And actually, half the time I view it as we embed ourselves within a business and be part of their team, and sometimes being that independent person, your shoulder to cry on.
[15:33] Mark Wood: Very often people are sort of sick all over the table, tell you all your problems. And we can actually often act as that mediator between those on the coalface and the leaders in the business who probably might not. So we can construct something that says, we’re seeing these challenges that you might not have appreciated. I think these are things that we need to do about that. And it helps stitch people together. So it’s definitely not about making people redundant, or anything like that.
[16:05] Mark Wood: It’s about upskilling them and making their job more rewarding and ultimately for the business, get a better overall business performance.
[16:17] Rich Dale: Have you any other examples of those improvements that you’ve been able to…
[16:26] Mark Wood: Yeah, I think I’ll tie a bit of opportunity assessment, if you like. Where I was working with one business deeply ingrained into sustainability, quite a complex supply chain in the construction sector, and lots of deliveries going off to multiple sites. When you started drilling down into the data, there was almost a bit of a falling off the chair moment. When we’re talking to the leadership team, it’s like across all of this, over the course of the year, spending about £2 million on logistics, delivering carriage charges.
[17:10] Rich Dale: Yeah.
[17:11] Mark Wood: And when you drill even further down into that data, you’re able to see that maybe the same supplier is delivering two, three times a week into the business or to the sites.
[17:21] Rich Dale: Yeah, yeah.
[17:22] Mark Wood: That’s not great from a sustainability angle and it’s not great from profitability, and actually from a productivity point of view, just managing all of that. So when you broke it all down, you’re talking around about £2 million worth of spend and over 10,000 deliveries a year. If you even just halved that, just by being more efficient in terms of how we operate and manage the business and the operations, there’s a million pounds saving and we’re reducing our carbon footprint because we’re reducing the number of deliveries coming in on site.
[17:58] Mark Wood: You know, and that’s just simple. People get hung up about sustainability. Just get on and do it, you know, have an impact. We get too hung up about reporting this in minute detail. If you know that you’re halving the number of deliveries, it makes sense that you’re reducing your carbon footprint. Get on and do it. So there’s simple little things, but it all comes down to what does the data tell us.
[18:23] Rich Dale: Yeah, I know this is one thing that I can’t understand about people who are sort of anti-sustainability, you know, that they kind of, it’s like nearly all sustainability measures come with a cost saving, you know. Or never mind having cleaner air and things like that. You know, who wants to breathe in all that crap?
[18:48] Rich Dale: But you know, most of it really hits the bottom line. And if it forces us to think in a more lean mindset and it forces us to think more efficiently, it’s a win-win because that then changes the culture of the business.
[19:07] Mark Wood: Yeah.
[19:07] Rich Dale: You know, so, and I think that’s…
[19:09] Mark Wood: The bit around sustainability. No, it’s not just the environment. It’s about having a well-run business and all the ESG bit that comes with all of that. So again, this is why data and intelligence and reporting around all of those elements are fundamental to having a well-run business. When you consider the wider ESG implications, that governance of how you manage that is vital. And we talk about democratising data as a tool and a way of doing that.
[19:42] Rich Dale: I was going to actually come on to that because you mentioned at the start that you help people generally with analytics and the word itself can be off-putting for people. And we’ve found in some cases that, you know, again, it’s sort of that, you know, too much on, don’t bamboozle me with more tech. You know, how do you cut through? Like I love that term of democratising it because people are sitting on a gold mine of data in a lot of cases.
[20:14] Rich Dale: So how do you get that? I suppose it’s that back to that low-hanging fruit. How do you get that first convincing argument for people to say, actually, you know what, there’s so much opportunity here.
[20:27] Mark Wood: I think the way that we tend to approach is just show the answer, the possible, first. Yeah, because people get scared with data, business intelligence, think it’s expensive, think it’s really quite complicated, and we try and take that pain away. For people, just say, well, here’s the art of the possible. This is what it could look like. But what’s now really important for your business? What’s your biggest pain point where data might be able to unlock that? So what are you trying to achieve? And then we work back from that point of view.
[21:02] Mark Wood: What we try and do is just say, just tell us what you want, we’ll advise and guide you on that process. Where does that data live? And let us worry about the bit in the middle. So all you have to do then as a leader in the business is just go, I just need to see this. Let us crack on and let us sort the rest of it out for you.
[21:21] Mark Wood: We’ll engage with the team as we go along and build something that’s fit for purpose for the business that’s going to add that value to them, whether it be profitability, finance, reporting, supply chain, HR, marketing, whatever that might be. Where are those opportunities that give them the biggest pain?
[21:41] Rich Dale: 100%. Yeah. I think it’s, maybe I’m speaking for myself here, but you know, when you’re running a small business, you’re kind of thinking, I need to do everything, you know, and you can’t. You’re not an expert in everything. So, you know, it’s a recipe for disaster if you get stuck in the weeds of the how, whenever the how has been handled, you know, that there’s a solution out there for it. If you’ve got the right question, then how you arrive at the answer and give yourself that insight.
[22:21] Mark Wood: Yeah. We work with a business that was spending, as a business leader, 3 to 4 million pound turnover. Business fabrication business. He was spending probably four or five hours every weekend exporting Excel sheets out of his ERP system, looking at sales orders, sales invoices, gross margin, delivery performance and enquiry conversion rates. And he had an A3 sheet for one part of that that told him everything and told him nothing. But he viewed that, and there’s three or four different business units within his business.
[22:58] Mark Wood: We took all of that data, created a dashboard just covering those four areas of his business, and created for each of the business units, access for each of the individual business units and the leaders in those business units to be able to see the data for their own business unit, whilst the management could see their overall level. The impact on their profitability on the gross margin went from 43% to 50% in the space of 17 weeks.
[23:31] Mark Wood: And he used to say it’s the one thing that it did that nobody could argue with. And we had a bit of, that’s a load of crap. And then they went away, looked at it, came back, said no, no, it’s right, that’s fantastic, you know. And he used to say, I used to walk in the office and the team would be sat around looking at the charts, looking at the data, and he’d be getting phone calls then on a Friday afternoon saying why something wasn’t happening. He said, I’d never had that in 30 years. Now, just put that into perspective. On an annualised basis, that was around about £250,000 increase in gross margin, just by looking at the data.
[24:05] Rich Dale: Democratising it, it’s massive. And it’s creating that, or democratising the ownership of it. So not only has he saved himself what, four or five hours a week of that spreadsheet jockeying, that transparency has created ownership across the team for the things to be able to make decisions and take action.
[24:29] Mark Wood: Yeah. And that four, five-hour process on a weekend, on a Saturday, rather than do something with his wife and his family, maybe that’s why he did it, I don’t know. But it took him probably five minutes to download those Excel files and send them to us, and then we did the rest. And the next stage was, you know, it’s about automating then that process. So it’s not painful, but it’s just set out with, what do you want to try and achieve? What are the key pain points? What would have most benefit to your business? And where do we work then from there?
[25:03] Rich Dale: Yeah, 100%. Well, Mark, we’re sort of coming to the end of the episode so I like to ask all of my guests to leave the listeners with one actionable piece of advice that they can take away from the episode, something thought-provoking or actionable. So what would that be for yourself?
[25:27] Mark Wood: I might roll two into one and cheat a little bit. It’s me, give me an inch and I’ll take a mile. But I think it comes down to, when you look at your business, how well are you using data within your business? And really get to understand within your teams how many spreadsheet workarounds are being managed to give you the right decisions. And are you really making sense of that data? Do you truly understand it? Have a look at that.
[26:04] Rich Dale: 100%. I think you’re absolutely right. Comes back to that prior example. You know, it’s just so much time potentially going into looking at the wrong things or doing the donkey work and not seeing the woods for the trees, part of the pun. Well, Mark, I really appreciate your time. It was a really insightful episode. How do listeners and viewers get in touch with you if they’d like to pick up a conversation?
[26:35] Mark Wood: Yes, thank you. And thank you for inviting me to have a chat with you today. It’s been really good. So people can use your channels. We’re on LinkedIn. Mark Wood, Alliance Procurement Solutions. Follow me, connect with me on LinkedIn, follow our company page. And by all means, we’re updating our website. So it’s not great at the minute, if I’m honest, but Alliance Procurement Solutions is our web address, and we’ll be happy to talk to anybody who’d like just to have a chat and understand more.
[27:10] Rich Dale: Brilliant. Well, thanks again, Mark. It’s a pleasure to have you. We’ll see you soon.
[27:13] Mark Wood: Cheers, Rich. Thank you.
[27:15] Rich Dale: Take care.
