Q. Why would we need a Consultant to cut costs when we have people in our organisation who are responsible for this and who already do an excellent job?
We’re sure you do a remarkable job, actually, especially when you consider their many other responsibilities. The advantage is that a partnership with Synergy West would ensure that you have the suitable benchmarking data given the various projects and industries we have served over the years. Our width and depth of professional expertise covers in dozens of overhead cost categories that most companies cannot possibly afford to employ internally. And, in many companies, purchasing is just one of an employee’s many responsibilities, and commonly his/her focus is only on core costs. Reducing the cost of non-core overhead expenses is ALL WE DO.
Q. How could an outside Consultant know enough about our business to come in and tell us how to run it?
Our recommendations are always based on thorough, unbiased investigations. Our Consultants are industry experts who know exactly what to look for in contracts, invoices and statements for dozens of overhead expense categories. We would never claim to be experts in your business – but we ARE experts in ours.
Q. What can a Synergy West do that we can’t?
We leverage the data we’ve amassed from our cost reduction projects to negotiate the best value for your company. We find that companies who do perform their own benchmarking exercises internally tend to benchmark against themselves or against a limited-size universe. And while they may succeed in reducing a supplier’s cost, they may already be overpaying.
The sheer volume of Synergy West’s market data enables persuasive benchmarking capabilities. Suppliers cannot argue with data of this quality and scope. When you invite us to work with you, you no longer need to worry about the possibility of jeopardising your relationship with incumbent suppliers, and you no longer have to suffer through those awkward moments that can occur during price negotiations.
Synergy West’s broad category expertise and knowledge about the marketplace put us in the driver’s seat during negotiations. You can feel confident that you are getting the very best value, and comfortable that a professional and unbiased third party is executing fair and equitable negotiations on your behalf. Synergy West uses a systematic proven process that combines cutting-edge analysis tools with deep expertise and category know- how.
Our proprietary process results in best-in-class cost scenarios that clearly illustrate suppliers’ capabilities and allow us to optimise value for you. We monitor supplier compliance for 24 – 36 months to be sure you get what was agreed to (we are very good at catching mispriced items!). We know the supplier’s business, so we know what to ask for (e.g., we can freeze your costs when there are manufacturer price increases, get you average discounts for non-contract items, leverage substitutions – the list goes on.)
We take the pain out of the process. We implement and monitor supply agreements (a suitable role for a Consultant), and then give you the tools you need to manage the ongoing supplier relationship after we’re done. We do the work – YOU make the decisions.
Q. What exactly does Synergy West do?
Synergy West improve their client’s profitability by reducing common overhead costs - like insurance and office supplies - and by increasing value for the client. There is no reduction in the quality of your goods and services, and frequently there is even an improvement. Average savings across categories is nearly 25%.
Q. How do they do that?
Our analysts are experts from various industries. We bring relevant experience to clients. For example, the Synergy West network has consultants with dozens of years of high-level experience in certain categories e.g. tyres. These people have a deep knowledge of how that industry works, and an insider’s understanding of its services and pricing structure. To top it off, we have gathered invaluable benchmark data that shows how much money businesses like yours are paying for these services. This gives us a huge advantage when negotiating with suppliers, because we often know the supplier’s business as well as – if not even better than – the supplier does.
Q. What kinds of business expenses do Synergy West look at?
Overhead expenses such as freight, packaging, insurance, printing, merchant card processing fees, telecommunications, janitorial services, laundry, temporary labor, uniforms, waste management, small package freight, etc. We’ve done everything from a merchant card processing fee project for a multi- billion dollar company to a courier project for a small sausage manufacturer, and everything in between. There has yet to be an expense category that our expansive professional network hasn’t been able to tackle!
Q. If Synergy West finds a huge cost savings, face it, it could make the person responsible for purchasing look bad. Have any internal purchasing employees ever lost their jobs?
Not in our experience. Synergy West can only get a project done by partnering with the client’s internal purchasing or administrative team. We come in as a resource and assistant to the purchasing specialists. Conversely, we use purchasing specialists as a sounding board and advisor when we need information and guidance.
To have a successful project, Consultants from Synergy West rely on your help. So much do we value our clients’ internal staff that we abstain from any cost-cutting projects that involve staff reduction. In short, we are NOT a replacement for internal personnel. In fact, the employees with whom we work and successfully partner usually share the credit for enabling the cost savings. When a client gets outstanding results from Synergy West analysis it is because of the powerful combination of its employees’ aptitude and understanding of the internal workings with Synergy West’s analytical abilities and category expertise, benchmarking data and sophisticated analysis tools.
Q. Doesn’t cutting costs lead to a cut in quality?
Our goal is to provide cost-reducing solutions to our clients that deliver the best value. It’s not a matter of finding the lowest bid – in fact, 90% of the time the lowest bid does NOT win the contract. Our goal always is to maintain quality and reduce cost. Often we are able to improve quality without increasing cost. Then there are the times we both improve quality AND reduce costs!
Q. What kind of tools do you use?
We use uses procurement tools that are fit for purpose. The tool does everything from analyzing consumables to soliciting, tracking and managing the bid process. The end result is a detailed spreadsheet of the quantitative results of the bidding exercise, Synergy West performs a qualitative analysis that integrates supplier competencies and your company’s concerns about that particular expense category into the decision process. We combine tools, expertise, analytical savvy and negotiating skill to synthesize the rich information generated, and use it to improve your company’s bottom line.
Q. We already do everything possible to keep costs controlled.
Smart business people do their best to control costs. But it’s a lot of work and it’s a full-time job, so they tend to focus on core expenditures; rarely do they have the time or manpower to analyze the non-core expenses associated with the day-to-day operation of their business (utilities, telecom, janitorial, etc.). We are better equipped than most companies to negotiate with suppliers about overhead expenses. While companies generally go out to bid maybe once a year, we perform hundreds of bids in all expense categories every week, and we speak with suppliers all the time. We come from these suppliers’ industries; we know the insider jargon clients couldn’t possibly know. And we have reams of benchmarks to give us the negotiating edge.
Q. We’ve been with some of our suppliers for years. I wouldn’t want to change.
We respect clients’ loyalties to their suppliers, and we are happy to simply re- negotiate current agreements with them if changing is not an option or a desire. Again, 60% of the time the client ends up with the incumbent supplier anyway! Throughout our project we give each supplier’s product or service the attention it deserves, so you don’t have to. If there are savings to be had, you don’t have to feel awkward about asking for them, because we do that for you.
Q. Does it ever get contentious with the suppliers?
Even as we apply powerful competitive pressure needed to optimize savings for you, Synergy West works very hard to build strong relationships with your suppliers. We go as far as to debrief suppliers who do not win the contract, to help them understand what they need to do to be competitive in the marketplace so they might win the bid in the future. Suppliers see Synergy West as an unbiased partner who keeps the playing field level - which is exactly what we do.
Q. We have a good relationship with our suppliers. I trust them to do right by us.
Yes, but they know more than you know about their product or service, and this gives them the advantage in the buyer- seller relationship. Synergy West knows as much as – often more than – suppliers in non-core cost categories. We use our benchmark information to deliver the kind of competitive pressure that keeps supplier bids on track. This way, the trust you have in them is earned and validated over time. We have found that in 60% of our projects the incumbent keeps the business, only at a lower cost to the client.
Q. What is the Synergy West process and how would the employees participate?
First we gather data from your general ledger, thoroughly analyze what your company is spending and present your company with a report that identifies expense categories with savings potential. If your company decides to proceed based on our findings, we initiate, track and manage the bid process and present you with a report recommending a course of action. We continue to work closely with your company for the next 24-36 months to ensure that your company realizes the negotiated cost savings. Our commitment to “sticking around” and helping out for the ensuing months ensures ongoing sustainable performance.
Q. I’m beginning to see the value – what if I have more questions?
We look to you as the organization’s expert, and hope you see us as a valuable resource you can use to help manage overhead costs. We know that the appearance of a Synergy West consultant often causes concern. Talk to us. Ask us hard questions. If we are going to work together, we need you to feel comfortable and to trust us so that your company ends up with the best possible results.