Dixons reduces costs by £1 million with analytical approach

2 March 2011
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2 March 2011 | Lindsay Clark

Procurement at DixonsRetail has saved more than £1 million by applying methodical demand management and encouraging behavioural change.

Analysing and reducing demand from stakeholders has played a vital role in the success of projects to renegotiate telecoms contracts and reduce energy consumption, Rob Douglas, retail support purchasing director at Dixons Retail, told SM.

The procurement team at the company, which owns high street chains Dixons, Currys and PC World, invested a great deal of time in “right-sizing” company-wide fixed telecoms contracts, he said.

This meant monitoring incoming and outgoing calls at Dixons Retail facilities, figuring out which phone lines were being used, and analysing staff behaviour in stores and offices. This identified “zero-billing lines” which were no longer needed, and helped the team understand where the number of lines could be reduced.

And where calls were made, the team used a formula to ensure store-to-store calls could be handled 99.5 per cent of the time. Instead of staff ringing various extensions to find the individual they needed to answer a query, operations teams ensured they went to the right “hunt group”, Douglas said, so people knew they were responsible for picking up for that group.

“Optimising the hunt group means that when a call hits one of our stores it goes to the right people, as opposed to what it previously did - it just rang out all the handsets. The main benefit from that is service improvement for customers and internal people,” he added.

The retailer also signed a new virtual private network deal with BT following a competitive tender. Together these changes saved just under £1 million, which equates to around a 20 per cent saving a year. 

Meanwhile, behaviour changes have also saved money and energy at Dixons Retail stores and offices. Ensuring signage was only illuminated at night was one of the simple changes which helped to drastically reduce demand, he said. 

Dixons’ Retail procurement team identified the 100 stores with the highest energy consumption and lowest efficiency and spent £1.1 million on measures to change that. They made a 28 per cent saving on energy spending, which meant they achieved return on investment within a year.

“I remember people saying to me you can’t put energy measures in that are going to pay back inside three years. We’re getting £1.25 million out on the first year, as prices go up that rises to £1.75 million in year two,” Douglas said.

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