My Business - 18.09.06

Small Aussie business helps companies save big
A Sydney businessman has found a simple yet unique solution to help medium and big-sized companies save hundreds of thousands of dollars every year by joining together to obtain better prices and service from suppliers.

Supply Clusters of Australia (SCA) is the small company behind a big concept. It started ten years ago when Ian Cook, a former operations manager in manufacturing, began knocking on the doors of businesses nearby and talking to their procurement officers about the possibility of forming a group that would have greater buying power.

Today, Ian has 11 people in Sydney, Wollongong, Brisbane, Adelaide and Melbourne as his associates and gives companies greater buying power by bringing them together.

“The success of a small business like us is driven by persistence and enthusiasm. We’re just like a big family and we all enjoy dealing with our members. It’s really unique to have this friendly environment and it is something we probably couldn’t find in a large corporation. Also, because we’re only small, we use our own initiative and creativity to achieve solutions,” Ian said.

Supply Clusters associates currently negotiate deals for about 150 Australian corporate members with over 75 suppliers covering categories such as stationery, transport, electricity, couriers, human resources, travel and accommodation, etc.

“Suppliers give members fantastic deals because Supply Clusters allows them to access a large network of buyers and our associates act as free salesmen for them. In 2005, SCA members made $93 million in purchases from their preferred suppliers. And it’s important to know that a one dollar purchase cost saving still has the same bottom-line effect as four dollars sales increase,” Ian said.

Members of Supply Clusters pay a flat yearly fee to join the Cluster and then deal directly with SCA’s preferred suppliers. Everyone gets the same discount, small and large companies alike. Supply Clusters does not take a commission of purchases and their only income is the fee paid by members

One of the members of Supply Clusters is manufacturer Baltimore Aircoil. Materials Manager Brad Craft said they joined SCA in 1997 and has since saved about $110,000 every year.

“A small business like us with only 78 full-time employees doesn’t have the ability and resources to do in-depth research on prices of commodity items. Unlike bigger companies, we don’t have experts to advise us on, for example, office supplies, IT, telecommunications, etc. If it wasn’t of Supply Clusters, we wouldn’t have time to try and get better prices to save money,” Brad said.

“By joining Supply Clusters, we can access the expertise and knowledge of larger companies and learn from them. The opposite is also true as large companies are able to learn from smaller businesses that are more flexible and can react quickly in different situations. It is the collaboration between the two extremes – SMEs and larger companies – within Supply Clusters that is very useful,” Brad said.

Brad attended Supply Clusters’ 10th Annual National Conference in Brisbane at the beginning of September and learnt many valuable business tips.

“There were plenty of excellent speakers with sessions on the future of IT, organisational skills, corporate social responsibility, etc. The main theme was negotiation and it was very beneficial for me to see how larger companies negotiate,” he said.

Supply Clusters associates Mick Pearsall, Leigh Roden and John Greenhalgh have all left positions in large multinational companies to join the small team at SCA.

Mick became a NSW associate of Supply Clusters in 1999.

“With Supply Clusters, I had the opportunity to challenge myself by running my own small business. I’ve always been confident and a believer in the concept behind Supply Clusters,” Mick said.

NSW associate Leigh Roden became part of Supply Clusters four years ago.

“I wanted a change in career path and lifestyle. I knew Supply Clusters and believed in the process and results that could be achieved through the company. I’ve had over 30 years of experience in logistics and procurement, which is a great benefit for Supply Clusters,” Leigh said.

John Greenhalgh joined Supply Clusters as the Queensland Associate five years ago. He left a career in the international freight forwarding industry after over 30 years of experience as a Senior Executive, Director and business owner in three different countries.

“Supply Clusters offered me an opportunity to continue to use my business expertise in a way that gave me some flexibility. I also liked the idea of giving companies the chance to save big money,” John said.

Ian has travelled around the world and believes his Australian concept is truly unique.

“We are a knowledge community driven by the enthusiasm, trust and the will of our members to share experience and learning. Members’ savings are not only financial, but intangible, as they stay up-to-date about new processes and ideas,” he said.

Supply Clusters members have the opportunity to participate in networking events, exchange regular emails and attend monthly mini conferences to discuss experience, purchasing practices and a wide range of business issues and opportunities.

For more information on Supply Clusters, call Ian Cook on (02) 9449 8368 or visit www.supplyclusters.com.au.

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Released for Supply Clusters of Australia by Dennis Rutzou Public Relations.
For more information contact Kim Larochelle on (02) 9413 4244.