In preparation for English market opening, Tesco commissioned independent water specialist Waterscan to look at how it could optimise current supply agreements in Scotland, where retail competition already exists.
Utilising Waterscan’s well-structured water supply procurement service and overlaying this with the consulting team’s unrivalled insight into water charging systems enabled Tesco to make an informed decision about their water retailer and save £750,000 on its water costs. This achievement has now set a benchmark for best practice ahead of English market opening in April 2017.
Catherine Chebib, buying manager – renewable energy and environmental generation technologies at Tesco, said: “Through working with Waterscan, we have secured the best deal possible whilst ensuring all our key supply criteria have been satisfied. Waterscan tailored the tendering process to fit existing Tesco procurement practices ensuring it integrated smoothly with our usual systems. They utilised their deep insight into water company charging structures to assist with shortlisting and the final selection of supplier.”
Waterscan’s water supply procurement service is specifically designed to guide businesses and large organisations in any commercial sector towards their optimum solution in terms of service and cost, as Neil Pendle, Managing Director at Waterscan, explains: “With 1.2 million customers and a total market value of £2.4 billion, England is the largest retail water market in the World. With a wide variety of challenges such as price variations, metering issues, billing inefficiencies and overly complex tariff structures, businesses across the country will need to overcome these if they are to truly benefit from market opening. Our mission is to ensure that all customers achieve the best possible outcome for their water supply agreements. That’s why we developed our client-focused water supply procurement service.”
Six steps to a successful supply strategy
Waterscan’s water supply procurement process embraces six logical steps:
- Strategy development: define a strategy for the next five years to deliver on key drivers including service, flexibility, costs and terms.
- Solution design: develop a complete water consumption data-set for supplier comparison, while setting out desirable contract terms and cost reduction targets.
- Virtual RFP: conduct a pre-tender review of available options looking at pricing, servicing, innovation and added value services such as AMR.
- Competitive tender: run an outsourced end-to-end tender process incorporating supplier selection, RFP preparation, supplier management and negotiation.
- Contract negotiation: provide expert advice to procurement teams to deliver the best outcome, looking at flexibility, improved SLAs and further cost savings.
- Water bureau: conduct ongoing price benchmarks and supplier management to deliver against the strategic plan.
Importantly, Waterscan is completely independent, taking no commission from water suppliers, to ensure the utmost transparency and to guarantee best value for clients in line with their long term strategic goals. Waterscan draws on a large, constantly-updated bank of market data within Waterline©, its online water management system, to determine the best possible solutions available for each customer.
Chebib concluded: “Waterscan’s approach was comprehensive and professionally independent with Tesco’s best interests at the core of their work. We would have no hesitation in recommending Waterscan’s services for water procurement and look forward to working with them again when the competitive market opens in England in 2017.”
For over 21 years since the water industry was privatised, Waterscan has been helping clients reduce costs by millions of pounds every year. It manages over 30,000 sites in the UK with a total spend of over £120 million per year. In addition to Tesco, Waterscan has partnered with Tarmac, Sainsbury’s and The Restaurant Group on water supply procurement achieving, on average, savings in excess of 20%.