Founded in 1941 by André Blanchet, Ets Blanchet became the company Blanchet-Métalleries du Forez, handed down over the years from one generation to the next.
In 2002, Jacques Blanchet, who is the grand-son of the founder took the company over, combining the rich hand-crafted tradition with innovation to keep up with the three segments at the core of the company’s business: metallic roof structures, aluminium joinery and metallic works.
The company realises a turnover of 23.5M€ and their portfolio includes prestigious works such as the Cité du Design in Saint-Etienne, the Lyon 2 Library, the Saint-Exupéry TGV train station in Lyon, etc.
In the past 15 years, the turnover has doubled, a development linked both to favourable economic times and the company’s forward-thinking strategy. Nothing surprising then in the fact that in 2009, Jacques Blanchet, CFO at Ets Blanchet-Métalleries du Forez, and his associates decided to launch a large project of overhead expense reductions. Cyril Poméon, Client Manager at Expense Reduction Analysts was appointed to ensure the success of the project. Below is Jacques Blanchet’s account.
Client Interview – Jacques Blanchet, CFO, Ets Blanchet-Métalleries du Forez
Blanchet-Métalleries du Forez is a beautiful story of family transfer between generations; obviously the concept of continuity is more meaningful to you than to others. Is this the reason to start a course of action to reduce non-core expenses?
This company is an integral part of our life and the place where it is located is our roots. We try as much as possible to develop and continue what my grand-father built, which was developed and strengthened by my father; this is why we need to plan ahead. Even if 2009 ended with an increased turnover, it was still the end of a cycle. We need to be prepared to face a harsher economic future, and yet, remain profitable. In times of strong economic growth, optimising non-strategic costs is not a priority; but in times of crisis, it becomes an excellent leverage tool.
On the other hand, we put in place a computerised management system ERP and the indicators showed that there were potential savings, especially with the categories you were asked to investigate: insurance and health policies, temp work, plant material hire for our building sites. With the economic and financial situation getting worse, these cost categories needed to be under control.
You manage your company very sensibly; so why did you choose Expense Reduction Analysts to help you?
According to us, if you want a cost reduction project to bring long-lasting substantial results, you need the services of external experts. This is not something I say lightly. As regards expertise first: Expense Reduction Analysts’ unique approach calls on different fields of expertise for the same project; this guarantees that each project will be led by an experienced professional with a deep knowledge of their relevant cost categories, markets, protagonists and regulations. And because they only get paid if they generate savings, there was no financial risk. Why not do it?
But if you want your project to be truly fruitful you need to bring in external consultants who can objectively complete the project. Local business relationships are also much involved; some business customers may also be your suppliers, and you may have known them for years. This must be discarded if you want to have outstanding and long-lasting results. For all these reasons this is why I appointed Cyril Poméon.
What do you think of that approach?
We wanted to keep the incumbent suppliers for the insurance budget – quite a challenge! In spite of this one of your insurance experts, managed to get outstanding results. He analysed our insurance contracts regarding goods (car fleet, personal liability, professional risks...) and people and then started to discuss with our service providers. The interim budget required a strong involvement from your category expert. It is an important expense category that keeps pace with the growth of our turnover. You had to show expertise and shrewdness to find any reductions.
The consultant started with a thorough analysis of our needs which was a very sensible introduction. Our clients are located all over France. That’s why the expert advised that we should work with national networks located near our building sites instead of using an agency as we previously did that was managing most of our needs for the whole of France. Thanks to this piece of advice we hardly have travel expenses anymore. It’s just common sense! But as always you only realise the obvious when it is presented by an expert. And to show how unknowing we were, we used to employ specialist agencies that were quite costly. We now know, thanks to your expert, that we do not need that level of specialism. Also the “plant hire” cost category requested long negotiations with service providers. The expert in charge of this project signed framework agreements that truly reflected our needs with the best providers.
How did your staff react?
I did not register any dissent, which didn’t surprise me; this is probably due to habit as we had previously brought in external experts, especially with regard to organisation. We all know that everyone is caught in their own priorities and can’t keep an eye on what is seemingly less strategic. That is why staff immediately supported the process, being aware that it was in everyone’s best interest that the company be profitable. However, it is essential that the manager communicates clearly on the objectives of the project we delegate. Actually, it is not that much delegated. If you want the approach to be meaningful, it needs to be owned by each and every one of your staff. Experts go and employees remain. Sustainability means they need to carry on applying the right methods.
Are you happy with the results?
Who wouldn’t be? We are achieving 18% savings on goods insurance and 16% on people’s insurance. The interim budget has been reduced by 7%. When you think that this cost category can reach up to one million euros every year, you can only congratulate yourself with your decision to appoint external experts! Finally, these experts have allowed us to achieve 8% savings on plant hire, i.e. total savings of 150,000 each year!