The Corporate Procurement Manager, Bridgend County Borough Council, presented a  report that updated members regarding the service trading and operational performance from 1^st April to 31^st August 2014.

 

He advised that Table 1 in 4.1.1.showed turnover for the 5 month period with a modest overall service growth of 0.23% against target to the end of August.

 

Stores turnover has shown an increase of 5% whilst catalogue directs were down by 12.5%.

 

The growth has been achieved through increased sales to Cardiff (up 250%) and Vale (up 60%) schools, with modest growth for independents and Swansea.

 

Each of the 4 trading partners has shown a downturn resulting from overall budget cuts, thelate easter holiday period and a lack of project work. (catalogue directs)

 

Table 3 shows that BCBC has fallen by 10%, Caerphilly by 14.5%, Merthyr by 25.5% and RCT by 12.5%

 

The Head of Procurement - Caerphilly County Borough Council, noted that catalogue direct trade was down and asked what the reasons were for this, and what could be done if anything to improve trade in this area.

 

The Business Operations Manager Joint Supplies Service, Bridgend County Borough Council confirmed that this would rise near end of financial year, February/March 2015, when there would be the usual increase in the purchase of furniture for schools etc.  In terms of looking to improve trade in this area he felt there was nothing that really could be carried out to guarantee this only to ensure prices remain competitive in comparison with the Joint Service trading competitors.

 

The Corporate Procurement Manager, Bridgend County Borough Council, then continued  by confirming that year to date Income had risen from £561,000 to £587,000 and is £58K above target.

 

Table 5 in the report profiled expenditure and income.

 

Total expenditure year to date was £522,000, broken down as indicated, and the projected outturn for the year was running at a £39,000 underspend.

 

Variances of note are:

 

·           Employee underspend of £43,000 (due to manager post and a delay in recruiting the Purchasing Officer post)

·           Premises underspend of £11,000 (due to another service sharing building remaining in situ)

·           An overspend of £12,000 resulting from an undercharge for audit fees for 2013 and 2014.

Net income was projected as per target at £1,363,000 although almost half of this had been achieved within the first 5 months of trading.

 

The overall surplus was currently £146,000 with the projected end of year surplus of £134,000. This was £39K above target, and this compared with a trading surplus of £107,000 at same period in 2013, he added.

 

The Corporate Procurement Manager, Bridgend County Borough Council then reminded Members that a number of core PI’s are collected and reported to the Joint Committee for monitoring, and some of these confirmed that there was:-

 

·           A stock availability for first time pick - 96.38 against target of 96%

·           A stockholding value - currently £672k or 9.75 weeks against target of 8 weeks as we stock up for new school term. In the first week of September, this fell to £612k, compared with 625K same time last year

·           Debt management  - running at 4.3 weeks of credit income compared with target of 5.5 weeks (average£470K)

·           0.4% of this debt was over 120 days

A breakdown of orders by value was provided in table 7, which highlighted success in moving from lower value to higher value transactions, despite budget cuts.

 

The volume of orders below £25 fell from 23.89% of total to 21.25% while orders above £100 increased from 38.57% to 42.41%.

 

The Service Director, Procurement Rhondda Cynon Taf County Borough Council asked how the Stockholding Value measured in comparison with other organisations in terms of benchmarking.  He felt this would be worth examining in conjunction with the Business Plan, particularly in relation to turnover, and with a view to finding a building with sufficient space within it to hold larger quantities of stock.

 

The Business Operations Manager, Joint Supplies Service, Bridgend County Borough Council, advised that it was difficult to obtain details on how well or otherwise competitive companies were trading, as they obviously did not want to share this information with rival companies.  He added that it was possible to obtain this information on-line or perhaps through a Freedom of Information request.  He added that it was possible to look at ways of improving the stockholding situation, perhaps by working on a once a week ordering basis as opposed to twice per month, though this would impact on staff resources.  He further added that the stock supplies would reduce through customers buying later in the year as was the trend in previous years, i.e. the nearer to school term time etc.

 

The Corporate Procurement Manager, Bridgend County Borough Council confirmed that Service E-enablement was key to improving operational efficiency and a strategic objective for the service. This was primarily achieved  through the Service website, ePS portal (XCW) and the back office IT system.

 

Sales order analysis by volume of orders on table 8, showed the percentage breakdown of electronically received sales orders, highlighting increased use of the EPS hub.

A breakdown was given profiling use of the ePS hub by main customer as per table 9 in the report, showing that Caerphilly and RCT are the main users. In contrast, very few Cardiff and Newport sites used this method of ordering.

 

Whilst we have reported a slight downturn for web usage, the comparator figure last year was distorted, as there was an increase in web usage at the end of the year (effecting the overall full year figure) which was probably due to customers paying by card in order to have a commitment on their system before the end of the financial year.

 

In respect of Table 8: Sales Order Analysis in this section of the report, a request was made for a further breakdown at the next meeting in terms of percentages split between each of the Authorities that make up the service, particularly in relation to the Joint Supplies Service Website, to include details of transactions of an education or corporate nature.

 

The Head of Procurement, Caerphilly County Borough Council, felt that the service needed to maximise more the use of supply chains and requested that a report be presented to the next meeting on this, stockholding, and how we planned to modernise and improve these elements of the service going forward. Members agreed with this request.

 

The Business Operations Manager, Joint Supplies Service, Bridgend County Borough Council could confirm to the Joint Committee that the service was turning over more stock than last year.

 

The value of orders placed via the web was £419,000 year to date accounting for 15.7% by value, with the four partners accounting for 76.1% of the overall total by value.

 

As indicated previously, RCT County Borough Council, advised the Corporate Procurement Manager, Bridgend County Borough Council, were the main users of Purchasing cards and this financial year a total of £71,000 or 2.7% of transactions were processed via this method.

 

In relation to Sickness Absence and the monitoring of this, Members noted that the figures indicated in tables 12 to 15 inclusive, were from 1 April 2014 to 31 July 2014

 

During this period 134 days absence occurred equating to an average of 4.6 per person. (This compares with a BCBC average of 9.8 days)

 

Of this explained the Corporate Procurement Manager, Bridgend County Borough Council, 100 days were long term (over 15 days) and 2 officers who made up 71 days have now left the service.

 

He added that Table 13 broke down absence by staff group, and it could be clearly seen that the warehouse and transport staff form the largest proportion of sickness. This is also reflected in tables 14 and 15 which show breakdown of sickness by gender and reason for absence. i.e. male and muscular and skeletal.

 

As indicated in previous meetings, all absence is rigorously managed in line with BCBC policy and has resulted in:

 

·           3 welfare meetings

·           5 informal sickness absence meetings

·           4 formal review meetings two of which imposed sanctions (one was stage 2 - termination of contract, the other stage 1 which is written warning)

 

The Head of Procurement, Caerphilly County Borough Council stated that it was very important to ensure that all equipment stored within the County Supplies Service were fully compliant with Health and Safety regulations and requirements and that staff were regularly trained to this end also.

 

The overall debt at 9^th August 2014, which included 30 days trading, was £639,690, and the Corporate Procurement Manager, Bridgend County Borough Council confirmed that of this 0.4% was long term over 120 days.

 

Table 16 in the report then showed a breakdown of this long term debt, split into corporate, schools, outside bodies and catalogue sponsorship, with schools as the main offenders. He confirmed that issues regarding breakdown of long term debt would be shared with each of the Officers in the participating Authorities on a monthly basis.

 

A Member noted that the Joint Supplies Service was going to be re-located elsewhere from the Waterton Depot to another establishment.  He asked Officers when this would take place.

 

The Business Operations Manager, Joint Supplies Service, Bridgend County Borough Council, confirmed that this was scheduled for next August, and the move would result in the business not trading for around a month whilst the move proceeds.

 

The Corporate Procurement Manager, Bridgend County Borough Council advised that some soft market testing had been undertaken in order to establish a list of suitable sites/buildings where to re-locate the Depot.  A new building could be provided with racking in place which would result in saving.  However, some equipment and plant would be made obsolete as a result of moving and this would need to be replaced.

 

The Corporate Procurement Manager, Bridgend County Borough Council reminded that at a previous Joint Committee meeting Members agreed that the number of meetings be reduced from 4 to 3 per year, the next being on 29 January then June 2015. Due to the need to agree the revised constitution and business plan, it may be necessary to hold a further meeting, and the report recommended this be on the 24 April 2015 in Bridgend. Members agreed to this meeting being added to the calendar, if considered necessary.

 

He then advised that, as in previous years, it was planned to close the service between Xmas and New Year when business was traditionally quiet. The proposal therefore this year was to close the service from 25 December to 2 January 2015, with it re-opening for business on 3 January 2015 . Staff were expected to take annual leave during this period

 

RESOLVED:            That Members noted the content of the report and agreed the recommendation made in paragraph 4.1.7.2, that an additional Joint Committee meeting be convened if required on the above mentioned datein April 2015.