An explosive growth story

At first glance this might appear to be a some­what unsexy propo­si­tion and beg the ques­tion: “Why would we work with IESA?” The sec­tor it occu­pies is “indi­rect” pro­cure­ment. In oth­er words, IESA takes care of buy­ing and stor­ing things for its clients which don’t end up in the final prod­uct. This includes any­thing from safe­ty gog­gles and uni­forms to pro­duc­tion line motors and bear­ings.

So to grab the atten­tion of poten­tial clients, chief exec­u­tive Glenn Timms has a more up-front strat­e­gy.

He starts by list­ing clients. “In auto­mo­tive we work with Jaguar Land Rover, for exam­ple. In food we work with Kellogg’s, Pre­mier Foods and Weet­abix, among many oth­ers. In bev­er­age we work with Carls­berg, Greene King, Mol­son Coors, and in phar­ma­ceu­ti­cals, we look after AstraZeneca, Eli Lily and Pfiz­er. We also work with Gen­er­al Elec­tric, John­son & John­son and Proc­tor & Gam­ble…”

He can keep going.

Then he’ll men­tion his rev­enue. Not to be boast­ful (far from it as he bash­ful­ly explains), rather because the num­bers reflect the strength of IESA’s busi­ness mod­el. IESA – pro­nounced i‑esa, it sounds like iPad or iPhone yet shows its her­itage as it stands for Inte­grat­ed Engi­neer­ing Stores Asso­ciates – was found­ed in 1892 and gen­er­at­ed rev­enue of just over £1 mil­lion only 12 years ago.

We guar­an­tee we will improve your bot­tom line

Then it rein­vent­ed itself as a cloud-based indus­tri­al BPO (busi­ness process out­sourc­ing) spe­cial­ist. The mod­el made imme­di­ate sense to clients. IESA grew sales to £49 mil­lion four years ago, to £142 mil­lion this year and will pass £200 mil­lion in the next two years. It’s a growth sto­ry explo­sive enough to land IESA on The Sun­day Times Tech Track lists sev­er­al times as well as secur­ing many oth­er awards and acco­lades.

Atten­tion guar­an­teed, Mr Timms will then explain what IESA does.

In a nut­shell, it buys non-core prod­ucts and man­ages them on behalf of its clients. Jaguar Land Rover may keep the pro­cure­ment of wind­shields and brakes in-house, because it is core to them along with all oth­er direct mate­r­i­al and any­thing else we can take care of. This might include com­po­nents for main­tain­ing the pro­duc­tion line, repair, over­haul, health and safe­ty, con­sum­ables and sta­tionery. These indi­rect sup­plies account for around 20 per cent of expen­di­ture with a typ­i­cal man­u­fac­tur­er, proces­sor or assem­bler.

As a bulk pur­chas­er for approx­i­mate­ly 60 of the world’s lead­ing man­u­fac­tur­ers, IESA has phe­nom­e­nal buy­ing pow­er. It has rela­tion­ships with 20,000 sup­pli­ers. That’s the first way it saves mon­ey for clients.

Sec­ond, IESA will pro­vide a com­plete man­age­ment ser­vice for the trans­ac­tion and stock­ing of the prod­ucts on the client’s site. Ensur­ing that the pro­file of the inven­to­ry held, and hence client work­ing cap­i­tal, is opti­mised at all times. Reduc­ing client spend and low­er­ing the val­ue of their cash tied up on shelves can dou­ble the val­ue of sav­ings realised.

Third, it auto­mates and sim­pli­fies the entire P2P (pur­chase-to-pay) process. Instead of clients wrestling with hun­dreds and indeed thou­sands of pur­chase orders, invoic­es, pay­ments and rec­on­cil­ing sup­pli­er state­ments, they receive a sin­gle invoice.

The final piece in the jig­saw is the phys­i­cal han­dling of indi­rect stock. Mr Timms explains: “When we take on a new client, we man­age the indi­rect inven­to­ry. This means their stores employ­ees join us, under TUPE [Trans­fer of Under­tak­ings (Pro­tec­tion of Employ­ment)] reg­u­la­tions, although they stay in the same fac­to­ry or plant as before.

“The employ­ees respond pos­i­tive­ly because where­as before they were in a back-office func­tion, deal­ing with prod­ucts which the clients may not see as a strate­gic pri­or­i­ty, they work for us in a core func­tion which is rev­enue gen­er­at­ing and dri­ves our busi­ness. They are the front line of our team and have an excit­ing career path.”

IESA runs on a bespoke cloud-enabled SAP plat­form, mean­ing it is inher­ent­ly more effi­cient and user friend­ly than the paper, pro­pri­etary or lega­cy sys­tems used by many man­u­fac­tur­ers. Pro­cure­ment spe­cial­ists instinc­tive­ly grasp this, while Mr Timms says he wants to reach out to the C‑suite too.

“Once we explain the ben­e­fits, clients start to grasp why they should be work­ing with us as we guar­an­tee we will improve your bot­tom line. A client-sav­ing in excess of 10 per cent is the goal and is cur­rent­ly run­ning at an aggre­gate 11 per cent. We’ll save you mon­ey on pro­cure­ment, reduce your work­ing cap­i­tal and we’ll take care of the long admin­is­tra­tive chain, tak­ing over your mid­dle and back-office func­tions so you are free to con­cen­trate on the things which are real­ly core to you. Prod­uct sav­ings are often typ­i­cal­ly only 30 per cent of the over­all sav­ing,” he says.

Giv­en the chance to deliv­er his solu­tion, backed up with tes­ti­mo­ni­als from the long, long list of blue chip client rela­tion­ships IESA has secured in the past few years, Mr Timms feels he’s got a pro­found­ly attrac­tive propo­si­tion.

“While it might not trip off the tongue – the pro­cure­ment and man­age­ment of indi­rect mate­ri­als in man­u­fac­tur­ing and process indus­tries – once peo­ple under­stand what IESA can do for them, it becomes com­pelling. They lis­ten intent­ly and quick­ly fol­low up with the oppo­site of their open­ing state­ment: “Why wouldn’t we work with IESA.”

For more infor­ma­tion

Tel: 01925 857 585

Web: www.iesa.co.uk

E‑mail: [email protected]