Savings and processes’ simplification on Travel Cards for Kalmar Länstrafik
Kalmar Länstrafik (KLT) is a public organisation in Kalmar County, Sweden, in charge of public transportation in the county – buses, trains, medical transportation, etc. The company’s turnover is around 800 million SEK.
Jan Hägersand, partner at Expense Reduction Analysts, met the KLT management team in the spring of 2011 to present Expense Reduction Analysts and the way it works. KLT soon became interested and decided to work with Expense Reduction Analysts.
KLT’s core business is the procurement and management of public transportation, which is why they found it appropriate for Expense Reduction Analysts to investigate two cost categories, printed travel cards and plastic travel passes (these smartcards – i.e. electronic travel tickets – are now used as a means of payment on most buses and trains). In these two categories KLT’s staff had a lot of knowledge, but no procurement expertise.
Public procurement takes much time and effort, as it must comply with strict regulations. Regardless of the volume of purchase, it requires a lot of work to ensure the best outcome for the client, and a contract compliant with the law. These smaller categories were good for KLT to outsource.
Based on his long experience as purchasing manager, Jonas Scherp, partner at Expense Reduction Analysts Sweden, was commissioned to analyse the smartcards. Jonas chose to investigate the supplier market carefully to understand this rather complex category.
As KLT is moving towards cashless travel, the volume of smartcards is continuously growing, amounting to 1.2 million SEK/year.
There are not many players in the market, but Expense Reduction Analysts managed to find over 40% savings.
Implementation and further development of the electronic smartcards was an important part of the investigation. The implementation proved difficult, with many problems to solve, and Jonas –had to provide much assistance to both the supplier and KLT, in order to overcome initial difficulties.
KLT’s printing consists mainly of different types of timetables, brochures and marketing material, amounting to about 800,000 SEK/year. For this category, Jan Hägersand collaborated with Bert Kuypers from Munich, one of Expense Reduction Analysts´ best print experts, to investigate print and find the right supplier. He eventually recommended a print management consultancy, which provided around 20% in savings.
KLT now has one single supplier, instead of the previous ten providers.
Marketing manager Christer Olson shares his experience:
Why did you choose to work with Expense Reduction Analysts?
We did not have the time to do this job ourselves, and because Expense Reduction Analysts has a relatively risk free offer, we quickly decided to let them do the work for us.
How was it to work with Expense Reduction Analysts?
Expense Reduction Analysts works hard and carefully, and strive to do the best job for their client. They do not waste the client´s time with numerous meetings and are results-oriented.
Are you happy with your new suppliers and your savings?
We are very pleased with the new provider and the opportunities we encountered through this new cooperation. Of course we are also pleased with the savings, as well as with the simplification of our internal processes.
"We are very pleased with the new provider and the opportunities we encountered through this new cooperation. Of course we are also pleased with the savings, as well as with the simplification of our internal processes."