Marley is the UK’s leading heavy building material manufacturer of roof tiles and the ubiquitous Thermalite bloc. A significant proportion of its sales are in plastic rainwater products and flooring and it has manufacturing plants in Germany, USA, South Africa, Australia & New Zealand.
Marley’s profitability was being eroded through over capacity and the aggressive buying tactics of builders and builders’ merchants. ADR, as the result of a referral from a previous client, was asked to provide support and expertise for a board-led programme of economy of which purchasing constituted a significant part.
ADR’s aim was to identify areas of cost saving opportunities and to implement the changes necessary to achieve them.
ADR conducted an initial baseline review which showed that:
- Purchasing was mainly focused on transactional activity
- Significant levels of expenditure were single sourced
- Traditional ways of working were evident and embedded
- Relationships with Marley were manipulated by suppliers
- Year-on-year price increases were the norm
- New and cheaper sources of supply were being ignored on technical grounds
- There was no collaboration between the various businesses
- Maverick” buying was common
- Indirect expenditure was out of control
Overall, the assessment was of unfocused purchasing teams, struggling to meet supply requirements in a technically over complex environment using many single source suppliers. The main obstacle to overcome in implementing the changes required was a strong decentralised and autonomous culture.
ADR identified potential savings of £8 million and over a 36-month period provided the change management support and purchasing skill transfer to enable Marley to make significant progress.
Purchasing departments were restructured and provided with new purchasing processes and practices to deliver three distinct activities:
- Strategic purchasing
- Tactical cost reduction
- Transactional purchasing
- Supplier delivery and quality performance were improved.
- Cost savings of circa £18million were achieved.
Identify cost savings areas and purchasing skills transfer
Identified potential £8 million savings Purchasing departments restructured and new process put in place