Peter Worthington: engaging in PfH is very different from working with other types of customers.
PfH offers opportunities beyond the basics
Published: 05 April, 2012
When a Lancashire independent threw itself into PfH, it found a whole new way of trading – with a lucrative outcome. One merchant who has done exceptionally well with Unimer’s Procurement for Housing deal is Building Supplies (West Coast).
In a thrilling David and Goliath scenario, managing director Peter Worthington took on the nationals and was able to demonstrate significant savings for Blackpool Coastal Housing – cutting the housing association’s transportation costs, downtime and providing a more competitive offer on building materials.
Blackpool has had a terrific season, Mr Worthington says. It has benefited from the mild weather. “Tourism has had a boost, the promenade is being refurbished and the new tramways will soon be operational,” he points out.
“Further along the coast, however, Fleetwood has not fared well. The Northern Ireland ferry link closed last year and there is no business from Stena Line, which is a concern.
“The good news is that there are local schemes bidding for Lottery money,” Mr Worthington explains.
The merchant – which has traditionally majored in heavyside – now also offers plumbing and heating materials. It has five trade counters in four locations. Its main site is based at Fleetwood, but it also occupies a number of warehouses on this site which it purchased when other companies moved away.
Mr Worthington says it certainly helps when you can remove your boundary fence “because you can get a significant increase of yard space. This has helped us do what all traditional merchants do – to buy in bulk.”
Building Supplies has warehouses dedicated to timber, insulation, sheet materials and – because the company is a founder member of NBG – it has been able to tap into some of the best buying deals. “That has certainly given us a competitive edge,” he states.
The merchant has its own workshop where it can repair, maintain and test its fleet of 18 commercial vehicles, five vans and associated cars.
Harking back to its heavyside roots, Building Supplies also has its own
bagging operation and a bulk bagging hopper as well as a small unit for sealed bags. “That keeps the team busy when things are quiet,” Mr Worthington comments.
The merchant first ventured into PfH last summer. “We are very pleased with our partnership,” he says.
“Unimer got us to first base and we really appreciate its help. The benefit to BCH is that we help it to strip out many back-office costs. Among these are regular tendering, the raising of purchase orders and requisitions and the job of having to match them at the end.”
The merchant had to be reasonably IT-savvy in order to be able to present information to the housing association in a format that it requested.
“Initially, we thought it was only about being able to match the approved price list. But, in some instances, there was also a requirement to be better than that. The whole engagement is very different than with other types of customer. BCH wants us to be engaged with its clients – the social housing tenants.”
BCH has 5500 social properties and undertakes 37 000 ‘responsive repairs’ a year. It is monitored on completion – first-time in-full is its target.
PfH, Mr Worthington points out, is very much a community-based relationship. Regular community awards help the merchant to engage more closely with BCH’s tenants.
“The mindset has to be different,” he acknowledges. Sounds time-consuming. “Yes, but it really does pay off,” Mr Worthington states.
“While a merchant might take other customers to a football or a rugby match, public sector employees do not welcome this, preferring to opt for activities where their clients can benefit.
“We have to look at ways of helping them to become more efficient and to help BCH assist with, say, providing a bench in an open space or assisting with putting together a garden for elderly residents.”
Building Supplies has even renovated part of its premises and added training rooms which it has made available to BCH.
“We have regular review meetings. They give us a chance to put across opportunities for BCH and to raise any issues that either party might have.”
Building Supplies’ experience meant it could be more competitive than BCH’s former local supplier, but the merchant’s location wasn’t central enough.
Undaunted, Mr Worthington explained that Building Supplies’ large fleet of vehicles would be able to deliver to meet BCH’s requirements.
To show just how serious it was, Building Supplies also invested in a co-logoed vehicle which now provides BCH with a same-day delivery service.
“The big benefit of our collaboration is that BCH is now more efficient with its operations, maintenance and repairs because we eliminated the significant amount of downtime it had previously experienced when it had to go and collect materials for itself.
“We provided a double benefit to BCH – more competitive materials, delivered to the point-of-use.”
BCH recently won an award that recognised these improved efficiencies “and Building Supplies’ support was a major contributing factor”, says Mr Worthington.
“This contract has contributed significantly to the successful year we have enjoyed,” he adds. “It is not the sole reason, but we are nominally up on last year’s turnover and BCH has certainly supplemented our turnover in difficult trading times.
“It’s going to be a tough winter,” Mr Worthington warns. “The Public Spending Review is starting to have an impact. We have a number of civil servants employed in this area with five ministry locations – Premium Bonds, DWP, Land Registry, Nuclear Fuels and British Aerospace – as well as all the local authorities, all of which are restructuring.”
That is why he supports entering into a PfH partnership. “If you have the opportunity, I recommend it. I would love to replicate this business for our other depots with their local authorities.
“Of course, a merchant will need the PfH framework which Unimer has provided as a starting point.
“From that, there are opportunities above and beyond just selling basic materials,” he concludes.
This feature first appeared in the December/January 2012 issue of Builders' Merchants News.