The Group is focused on four initiatives to improve business performance and support the delivery of its strategic pillars.

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working more closely with key suppliers

HISTORIC POSITION

  • Procurement was uncoordinated and conducted at multiple levels within SIG.
  • The Group was not fully leveraging its size in the marketplace and was paying different prices for the same or similar products.
  • SIG had a long tail of suppliers.

PROGRESS

  • SIG is changing its approach to procurement by professionalising the function and investing in training and new resources.
  • The Group is coordinating its purchasing through six international category forums covering roofing, ceilings, technical insulation, structural insulation, air handling and dry lining.
  • This will enable SIG to consolidate volumes and better leverage its size, work more closely with selected suppliers to reduce costs in the supply chain, and grow its own label brands.

MILESTONES

Fully recruit procurement team

(H1 2014) COMPLETED

SIG has recruited 27 procurement specialists, who have joined from the construction industry as well as from other sectors, such as retail.

Reduce suppliers by one-third

(2015) ON TRACK

The Group has reduced supplier numbers by 22%, from 9,678 in 2012 to 7,573 in 2014 and is on track to meet this milestone.

Grow own label by 50%

(2016) ON TRACK

SIG is targeting a 50% growth in its own label products, from c.10% of Group sales to c.15% by 2016.

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Further optimising OUR network

HISTORIC POSITION

  • Sub-optimal network structure in some parts of the Group.
  • Too many branches in some areas and too few elsewhere.

PROGRESS

  • The Group has made significant progress consolidating its network over recent years.
  • SIG is continuing to further optimise its network by reducing branch numbers in its UK insulation and interiors business (SIGD), and Northern Germany, and by expanding the number of sites in its UK exteriors business, the South of France and Southern Germany.
  • Concurrently, SIG is undertaking a comprehensive supply chain review. This review, which is due to report in Q3 2015, considers how the Group can most efficiently and best serve its customers from receipt of order to fulfilment.

MILESTONES

UK branch rationalisation (Phase I)

(H1 2014) COMPLETED

The Group further rationalised its UK network by merging six SIGD branches in 2014.

North East supersite appraisal

(H2 2014) COMPLETED

SIG opened a new supersite in the North East of England in December 2013, which combined four branches into one. The supersite continues to perform well and was ahead of its budget in 2014.

Scope UK ideal network (Phase II)

(H1 2014) COMPLETED

The Group concluded that there are further opportunities to rationalise its SIGD network and potential to grow its UK exteriors business either organically or through acquisitions. These plans are being implemented.

Scope Germany ideal network

(H2 2014) COMPLETED

SIG concluded that there are some opportunities for limited consolidation of its network in the North and the development of a new “City” model.

Our VISION is to BE STRONGER together. THIS UNDERPinS the DELIVERY OF THE Strategic initiatives and our aim to make SIG’s whole greater than the sum of the parts.

In 2014, which was the first year of the programme, the Group made strong progress on its Strategic Initiatives, delivering a net benefit of £10.1m, well ahead of its original £1-5m target. Going forward the Group continues to target a cumulative net benefit of c.£20m in 2015 and c.£30m in 2016 from this programme.

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IMPROVING FLEET UTILISATION

HISTORIC POSITION

  • Inefficient scheduling due to little or no use of technology in the Group’s commercial fleet.
  • The purchasing of lorries and forklift trucks across SIG was ad hoc and uncoordinated, meaning that the Group was not securing the best terms from its suppliers.

PROGRESS

  • The Group is changing the way it schedules its fleet and has implemented telematics in its UK and French commercial vehicles.
  • SIG has also signed Group-wide purchasing agreements for its forklift trucks with a single supplier, and has adopted a dual sourcing strategy for its fleet, having signed agreements with two suppliers.

MILESTONES

Implement telematics (UK)

(H2 2013) COMPLETED

Telematics was rolled out across the Group’s UK fleet in 2013.

Forklift truck purchasing agreement

(H2 2013) COMPLETED

A Group-wide purchasing agreement was signed with Linde in 2013.

Implement telematics (Mainland Europe)

(2015) IN PROGRESS

Roll out in Mainland Europe has been slower than originally anticipated. It has now been implemented in the Group’s French fleet and is due to be rolled out in Germany and Poland during 2015.

Fleet purchasing agreement

(H1 2014) COMPLETED

Group-wide purchasing agreements have been signed with Mercedes and DAF.

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Providing Our Customers With more choice

HISTORIC POSITION

  • No consistent approach to eCommerce across SIG.
  • Some ad hoc website developments, for example in the Group’s ATC business, which although successful, are small and not integrated.
  • Less than 1% of the Group’s sales are through the internet.

PROGRESS

  • SIG is now developing a scalable online offering on one platform, which will support purchasing on multiple devices.
  • The Group is focusing on the UK first, where it will be integrated with its new ERP system, Kerridge K8. For the first time it will provide customers with a single UK business and product proposition.
  • Fulfilment will be carried out through SIG’s branch network.

MILESTONES

Design UK platform

(H1 2014) COMPLETED

The design phase of the Group’s new UK eCommerce platform was completed on schedule in 2014.

Launch UK platform

(2015) ON TRACK FOR 2016

The website is now in its development and build phase, with SIG targeting launch in early 2016.

Mainland Europe strategy

(2015) COMPLETED

SIG is already successfully operating some eCommerce sites in Mainland Europe. It will continue to progress these local solutions.