Contractor Keltbray has achieved substantial savings across the group since introducing COINS ERP software, according to group supply chain manager Darren Aldridge.
He was speaking at yesterday’s Digital Construction Summit 2022 session on boosting productivity with technology.
Keltbray has grown its turnover to £428m in recent years, transforming from a demolition contractor into a diverse construction group with 26 business units. The group has introduced ecommerce solutions from COINS to support its growth.
"We found that we had over 60 PPE suppliers across the group, and we’ve reduced that to just four."
“We set out to create a seamless data interchange between our suppliers’ ERPs and our own, speeding up the buying process and introducing electronic invoicing and procurement,” explained Aldridge.
“We typically process 90,000 invoices a year at Keltbray. After introducing e-invoicing, we turned 40,000 invoices electronic during 2021. Staff productivity improved, with a 66% saving in administrative back-office processing. We also have improved visibility, with a full audit trail for every invoice, and better forecasting.
“On the procurement side, we have eliminated six to eight hours of data entry every week for the procurement team. This has also created efficiencies for our suppliers, meaning we can secure better rates.”
The ERP introduction has meant rationalisation of Kelbray’s supply chain.
“The 80/20 rule applies – 80% of our spend is with 20% of our suppliers – so we targeted the high-level suppliers and put in place service level agreements with them,” said Aldridge. “For example, we found that we had over 80 PPE suppliers across the group, and we’ve reduced that to just four.”
He said the new processes are not cost-effective for suppliers who send in only 30-40 invoices a month, and that some suppliers were unable to send invoices in the required format.
Change management
“There has been a change management process at Keltbray,” Aldridge added. “Some staff and suppliers preferred to work with paper. So clear communication and training are key.
“Construction is far behind other industries in terms of eCommerce. The key is to get staff buy in and begin the change management process. We’re on that journey.”
Yan Llamas, COINS group product marketing and design director, was another speaker in the session on productivity.
“With ERP software, what we are trying to do is take the 1,000 or more things that happen in the construction process, and make them 1% better,” he said.
Also on the panel was Katy Dowding, Skanska vice president and a member of the Construction Productivity Taskforce. “Productivity is not about making people work harder, it’s about making them more productive, and that means improving processes and removing blockers,” she said. “We need to think about productivity from the outset of a project, and that means we have to collaborate and work together rather than ploughing our own furrows.”
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