Better buys in Swaythling: Consortium turns up the heat

Better buys in Swaythling: Consortium turns up the heat


Swaythling Housing Society is now part of the Radian Group but when the time came to replace its stock of boilers it recognised the benefits of joining an even larger consortium. The Radian Group is about 15,000 homes. Across the consortium there would be 70 or 80,000 homes in management. There are a larger number of boilers to be replaced each year and by working collectively we can secure a far better price per boiler than we could do for our individual organisation. There are alternative methods in the marketplace for procuring materials such as Procurement for Housing. As a direct labour organisation we do use Procurement for Housing for purchasing other types of materials. However the consortium went in to this in depth and actually specified specific products which has lead to greater savings than could have been achieved by using external procurement bodies. With its new-found purchasing power the consortium could choose exactly the product it wanted, bearing in mind both installation and ongoing maintenance. Servicing is very, very much quicker. It’s all so much easier because you just undo a few clips and you can gain access to everything. More or less you can get these serviced in about half an hour now, instead of the older boilers where you’re doing a full strip down. That’s an hour gone and sometimes more. And the chosen manufacturer Buderus is now benefiting from the feedback the consortium’s direct labour organisation can provide. They have started to listen to the actual engineers that do install now. So
they’re actually listening to us as to what would make our life easier and they’re actually implementing that into their boilers. Part of the purchase deal involves a five year manufacturer’s warranty which
Swaythling is handling in-house. As a direct labour organisation we’ve been very fortunate to set up a deal directly with Buderus where we can carry out the breakdown service during those five year parts and labour warranty. This of course gives us extra revenue streams so we can bring in finances from external sources. And for local supplier PTS the consortium has delivered a growth in business. Everyone knocks us down on price but fundamentally for us, us with Swaythling and Buderus all came together and so prices are key but service for us as PTS, has been the main, main picture. As a package now for PTS we’re getting lot more growth from Swaythling. This has lead to us negotiating other deals for things like refurbishment of bathrooms suites and plumbing and heating parts and day-to-day parts which we use for our day-to-day routine maintenance. Because we have that relationship now we can sit round the table, look at the price on offer, compare that to other procurement clubs, look at volumes and they can offer great savings. As a sector, housing associations I think do work well in partnership. We talk the language of partnership instinctively and we are all trying to do the same thing. So there’s an inherent good sense and given that the price was a good price for the end product there was a big incentive there because we’re all wanting to deliver what we deliver, in terms of customer service, more efficiently. It’s anticipated that over the period of the contract we will be saving £2.1 million on the procurement of those boilers between all consortium members and a further £1.7 million in non cash benefits, such as extended warranties. So, what stands in the way of taking more advantage of consortium purchasing? I think the barriers to consortium arrangements indeed most arrangements are around people and whether they share a vision and sense of direction and want to deliver the project for the benefits identified. Clearly those are barriers that we overcame very effectively because there is such a clear case that this was the right way to deliver the service we were setting out to deliver. ENDS

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