Tag Archives: United Kingdom

Two thirds of buyers not managing supply chain risk effectively

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Almost two thirds of buyers think their organisations are not managing their supply chain risk effectively.

Responding to a mini-poll held during a webinar organised by Supply Management in association with business information publisher Bureau van Dijk, 63 per cent of listeners said they didn’t believe their organisations managed threats in the best way.

Ted Datta, BvD’s strategic account director – London, said a majority of negative response underlined the increasing awareness among companies and buyers of the key importance of good supplier risk management. This was increasingly important because legislation was covering new and wider areas, said Datta.

“Know your suppliers, business partners and third parties,” he said, emphasising buyers needed to be up-to-date with new risks as situations changed every month. Datta said as there was so much information to monitor, companies could segment their supply base to identify key strategic suppliers and monitor those suppliers ‘in real time’ or as frequently as possible depending on their resources. Others could be reviewed in a more structured way, he said.

David Lyon, head of procurement at Cancer Research UK, told the webinar, Enhanced supplier due diligence: the implications for supplier risk management, reputation was vital for a charity and it had to ensure suppliers were aligned with its core purpose. “As an organisation that spends 80 per cent of every pound donated on our core mission of research, we must work hand in hand with all our suppliers,” he said.

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Companies need to realise the benefit of supply chains, says Professor Jan Godsell

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Companies need to realise the benefit of supply chains, says Professor Jan Godsell

We are all more involved in the supply chain industry than we might think. The products we buy and the places we work can all have some sort of impact on supply chains. We all contribute in some way, and in order to develop good practices in supply chains it has to start with leadership at the top.

Dr Jan Godsell, pictured, professor of operations and supply chain strategy at WMG, University of Warwick, is an expert in this field and has developed supply chain strategies in a number of FTSE 100 companies. She recently spoke at Business Reporter’s Supply Fest 2014 event on how to strategically align your business to get the best results in your supply chain.

“In the UK we talk about the economy being service orientated,” she tells us when we catch up with her post-summit. “People do not realise 80 per cent of our population work in the supply chain. Whether you are a farmer producing food or you work in a factory, have a lorry that moves the food or you’re working in a store to distribute it, that is all helping to feed the nation. Supply chains have an omnipresence that people do not realise.

“The more we can do to help raise the visibility of supply chains and help people understand how they contribute to that positively – not just to the UK economy, but also the European and global economies. That will really help to inspire people to work within it.”

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Six Best Practices Utilities Can Employ to Improve Collections Performance

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Six Best Practices Utilities Can Employ to Improve Collections Performance

Utilities face increasing pressure from stakeholders and communities to improve their financial performance and profitability by minimizing write-offs for uncollectible accounts. West Monroe Partners recently benchmarked clients to identify best practices used to improve utility collections performance. While collections performance is highly measurable, visible, and actionable, it is also influenced dramatically by local ordinances and challenges that are unique to each utility. Our benchmarking effort identified six best practices that utilities can employ to improve their collections performance. Some utilities are hesitant to change collections practices, fearing a corresponding drop in customer satisfaction. West Monroe’s benchmarking found the opposite to be true — generally, utilities that implement and strictly enforce collections policies have higher customer satisfaction.

Best Practice #1 – Collect and Maintain Good Customer Data

To enhance collections performance, you first need to know your customers and debtors. At account setup, utilities should positively identify customers by requiring a social security number or driver’s license number. With this information, utilities can review past payment behavior (if available), or perform soft credit checks.

Best Practice #2 – Practice Premises-Based Billing

It is difficult to verify tenant demographics, and tenants’ transient nature increases utilities’ risk of not collecting payment. To address this risk, some utilities capture both tenant and property owner data, and will bill property owners or landlords in the event of tenant non-payment, especially in high tenant populations (e.g., college towns).

Best Practice #3 – Employ Customized, Risk-Based Processes

Aggressively treating all past-due accounts in a similar fashion is expensive, unrealistic, and could impact public-perception of utilities. To combat this, and to maximize effectiveness of treatment, utilities should use analytics to segment customers into low, medium, and high-risk pools.

Best Practice #4 – Make it Easy to Pay

By sending timely bills, with actual meter reads, and presenting bill information in an engaging and clear layout, utilities can improve on-time payment. When necessary, estimated bills should leverage customer history, seasonal usage patterns, and weather trends to mimic the actual amount due as closely as possible.

Best Practice #5 – Leverage State Laws and Local Ordinances

Multiple utilities surveyed cited issues of political pressure when attempting to perform collections activities. Survey results indicate that utilities which have a published delinquency policy, including fees, timelines, and cutoff practices, face the least political pressure.

Best Practice #6 – Make Utilities Accessible

While our firm typically works with utilities to improve business performance and enhance customer experience, we also strongly believe that utilities provide a commodity service that everyone deserves access to. Fortunately, this is something utilities can incorporate into their collections strategy.

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