Based in Inverclyde and set up via a stock transfer in 2007, River Clyde Homes (RCH) manages around 6,000 properties and provides services to a further 2,250 homes.

With social landlords under greater scrutiny from the Scottish Housing Regulator and new procurement legislation coming into force, RCH wanted to review and enhance its procurement processes.

PfH Scotland was commissioned to undertake a comprehensive evaluation of the landlord’s £31.2m procurement spend with the aim of increasing both efficiencies and compliance.

How we helped River Clyde Homes integrate procurement into its business development plans….

The team at PfH Scotland cleansed and classified data from River Clyde Homes’ 2015 procurement expenditure before inputting figures into its Quantum software for analysis.

Data was examined according to spend distribution, locality of spend, spend by category and it was used to analyse invoices and relationships with strategic suppliers. A meticulous assessment of the landlord’s procurement practices also took place and compliance levels were measured in line with the new regulatory landscape.

The findings – presented in a comprehensive spend analysis report – identified 12 clear ways that River Clyde Homes could drive out cost, boost savings and mitigate supply chain risk.

This included ways to minimise the volume of low value invoices; enhanced management procedures for high value contracts and the role of procurement staff in reviewing higher value expenditure.

RCH staff were briefed on every aspect of the Procurement Reform (Scotland) Act, with the PfH Scotland team outlining each regulation in detail, the action that is required and all timescales involved.

PfH Scotland presented the 12 key recommendations to managers across RCH, most of whom do not deal with procurement on a daily basis but who are often involved in procuring large capital works or services.

These presentations put the results into context and ensured managers understood the reasoning. Training, both on new procurement regulations and enhanced procurement processes, was delivered.

RCH has now factored PfH’s recommendations into its business development plan and is using the review to inform its procurement strategy. One of these new approaches includes incorporating the procurement function into the finance department. This enables enhanced procurement and wider financial controls as well as more effective resource management, giving the procurement team access to a wider resource pool.

Operating Model:

• Dedicated account manager from PfH Scotland with additional support from central procurement services team
• Comprehensive review of procurement spend through analysis of data, benchmarked against sector
• Detailed spending report identifying where improvements can be made
• Bespoke procurement training from PfH Scotland to update RCH managers

Results:

• RCH now has baseline information against which it can gauge future performance
• PfH Scotland’s spending review assisted the landlord in devising a procurement strategy that delivers corporate objectives and legislative compliance
• The review identified key areas with the most potential to deliver savings and greater efficiency
• Supported RCH to rationalise supplier base
• Identified potential savings through reduction in number of low value invoices
• Enabled RCH to maximise potential for savings around high value expenditure