Case Studies

Why CSME

The ability to increase profits through sales growth is a huge challenge for most businesses in the current economic environment. Organizations have to find multiple ways to reduce costs in order to improve margins or simply to survive.

The Center for Spend Management Excellence was created to address this problem for mid-sized companies with this clear mission:

• to save companies money in specific areas of cost or “spend” without disruption to daily operations.
• to provide Cost Reduction Experts in multiple areas of spend.
• to increase our clientele’s profits with proven methods to lower routine operating costs.
• to provide a cost-free resource allowing you to access the best providers for spend management with no risk.

The Center for Spend Management Excellence is America’s only cost reduction organization focused on mid-sized businesses. We improve your bottom line by reducing what you routinely spend in operating costs. Actual category experts, not generalists, are deployed, bringing specific expertise to you with no fees, no risk, and zero costs.

When I was the CEO of a mid-sized business I thought we did a good job of keeping operating costs as low as they could be. It turned out we’d only squeezed out the easy, obvious savings. I became convinced we could reduce costs further without hurting my business when experts showed us how to do it properly. The savings went right to the bottom line. I became so positively thunderstruck that I helped form the CSME. I now work with a wide range of organizations, showing them how to save on their ‘spend’ that goes right to their bottom line.

Case Studies

Professional Services

A mid-sized professional services company with 100 employees and two locations was dealing with some cash flow issues and wanted to investigate any available tax savings opportunities. Working with a CSME member organization that had extensive knowledge with state tax codes resulted in recovering $60,000 and creating future savings of $20,000 per year.

The CSME member reviewed the company’s prior years of personal property tax returns and associated fixed asset records. They toured the offices to get a better understand¬ing of the taxable assets. Using extensive knowledge of state tax codes, the prior three years’ Personal Property returns were amended, correctly reflecting the clients’ true tax situation, and resulting in the $60,000 tax refund. By implementing a new reporting system an additional $20,000 per year will be saved.

The process took three and a half weeks to complete with no net cost to the client.

Project Summary

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Catalog and E-commerce Sales

A publically held and traded well-known brand of party and craft supplies contacted the CSME member, unsolicited, based on the member’s reputation and performance. The client organization had a spend of over $60 million in FedEx shipping in a highly complex supply chain. Through their efforts, the CSME member drove a savings of $13 million back into the client organization.

The CSME member used their proven framework to obtain and analyze data without involving the client organization or any of their staff. All facets of the project – from shipping profile creation to issuance of the Request for Proposal to analysis of the final bids – was handled by the CSME member and updates were provided to the client organization. The client maintained full control of the project and was able to review all findings and offers prior to accepting any cost-saving recommendations.

The process required seventy-five days to complete with no net cost to the client. The CSME member was also instrumental in working with other vendors to the client organization to ensure an integrated, seamless project.

Project Summary

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Manufacturing

A CSME Waste Management Expert performed a waste analysis for a large manufacturing company located in the Mid-Atlantic Region. This customer produces large amounts of non-traditional waste streams such as wood scraps, dust, as well as different forms of plastics. For years the company was wasting thousands of dollars by land filling these waste streams and utilizing equipment that was not providing the most efficient processing of their waste.

With 40 plus years of experience and a nationwide network for recycling we were able to increase their overall recycling initiatives by finding markets for their wood waste and plastics that they were not able to take advantage of on their own. They now divert 13 tons of material per month from the landfill through recycling. The initiatives helped this customer reduce their monthly expenses on average by 60%, resulting in an annualized savings in excess of $27,000.00

Project Summary

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Consumer Products

As marketers come under increasing pressure to demonstrate that their media budgets directly add to the bottom line they typically look to cheaper forms of media that may or may not increase sales. Often their decisions on which media to shift dollars are based on audience data supplied by media sales representatives, or “in-house research”, which also relies on data supplied by the property owners.

Both of these approaches lack in critical methodologies and the use of important planning tools. This was the case with a health supplement company with national distribution that was spending over 7 million dollars a year in media.

Through careful analysis of customer research and aligning media channels by utilizing the proper tools and planning methodologies the CSME member saved the client over 1.3 million dollars a year and increased sales by 12%. The savings went directly to their bottom line while the increased sales helped fund the launch of new products.

Project Summary

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Government Contractor

A large defense contractor in the Mid-Atlantic Region needed to implement a Green Recycling Initiative to protect their image as well as reduce costs. A CSME Waste Management Expert performed weekly audits to determine the composition and percentages of their waste stream.

As a result several areas were identified for improvement. Significant efficiencies were gained through equipment changes and service schedules. Additionally, an E-Waste recycling program was implemented to protect company secrets and reduce liabilities from improper disposal of electronics containing sensitive information. The bottom line is a 60% monthly reduction in expenses resulting in $31,000.00 in annualized savings. More importantly the contractor is now in compliance with electronic waste disposal requirements which could have resulted in significant penalties and loss of business.

Project Summary

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Business Equipment

A well-known manufacturer and distributor of point-of-sale card swipe terminals had just divested from its parent organization in hopes an initial public offering. Prior to this, it had managed it’s shipping costs by being part of the parent organization’s spend and agreements. Faced with having to negotiate it’s own carrier agreement with one-sixth of the previous revenue, they called on the CSME member. Even with the decline in available revenue with which to negotiate, the client organization realized a project savings of $2,361,000 or 45% reduction in spend.

The CSME member used their proven framework to obtain and analyze data without involving the client organization or any of their staff. All facets of the project – from shipping profile creation to issuance of the Request for Proposal to analysis of the final bids – was handled by the CSME member and updates were provided to the client organization. The client maintained full control of the project and was able to review all findings and offers prior to accepting any cost-saving recommendations.

The process required seventy-five days to complete with no net cost to the client. The CSME member created customized dashboard reporting which allowed the senior executives to quickly gauge how this niche spend area was performing and to share insights with the Board of Directors. The company successfully completed its IPO during the term of the project.

Project Summary

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Medical Testing Services

A large medical testing company with 3,000 employees asked us to review their credit card processing charges, and processes. While reviewing their last 3 merchant statements and evaluating their current processing system, we found there was an opportunity to streamline the process. At the time, they were using a traditional credit card terminal where you would normally swipe a credit card, however they never had any cards on hand and every time their accounting personnel had to run a transaction they had to get up and go to the machine which was in the middle of the room.

After analyzing their process, we determined that we could set them up with an online system where not only could all the rep’s run transactions at the same time, but they could also do it from their computer without having to disrupt their work flow.

In addition to the new system being more efficient, it also provided more transparency and added information that would now be passed to the cardholder to help reconcile and track card usage, while streamlining the accounts receivable process and maintaining PCI-DSS compliance.

The process took three weeks to complete with no net cost to the client.

Project Summary

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Automobile Dealership

A medium size automobile dealership processing $40,000 per month in Visa / MasterCard transactions that had been with their local bank for 10 years received, a letter stating that their fees were going up. They contacted us to see if we could match their old rates or do better for them. Once we analyzed their last 3 months statements, we found out that they were being charged more than 1.00% above the cost for Non-Qualified transaction and they were not getting their rebates for Debit transactions.

We put them on our cost-plus program, and by doing so, we were able to lower their overall effective rate from 3.62% down to 2.18% cutting their monthly fees by 40%.

This was all done in a matter of days. They sent us the 3 statements on Monday and we went over the savings the next day. On Thursday we reprogrammed their existing terminal and they started processing at their new rates.

There was no cost to switch or reprogram the terminal, and the savings started immediately.

Project Summary