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Why are operators ‘scrapping’ £200M every year?

With operating costs spiralling, manufacturers and retailers are having to face tough cost saving decisions impacting their workforce and suppliers. Are too many ignoring much simpler and less painful ways to cut operating costs because they cannot see how to solve an age old problem, for example the loss and theft of transit equipment?  Bill Howie, CEO of ACQSYS thinks this is an issue which few businesses are addressing.

Every year manufacturers and retailers are spending more than £200 million of capital replacing stolen transit equipment – cages and stillages and high value items such as beer kegs – to make good losses due to theft or inefficient control measures. Add to that the cost of disruption and lost sales and the problem becomes even more acute. The rise in scrap metal values has exacerbated a situation that has been around for many years but has now reached a level that can have a significant impact on a company’s bottom line.

“Operating costs are rising every day and management teams need to find ways to trim unnecessary outgoings, but most have not realised the significant savings that can be made very close to home. In the past with transit equipment, which is not seen as ‘high investment’, it has often been seen as simpler to take the loss and replace the equipment, especially with the pressure to get goods delivered on time” said Howie.

“Being able to recover missing equipment not only cuts costs but also improves supply chain efficiencies. At ACQSYS we have been able to demonstrate that the efficient monitoring and speedy recovery of missing transit equipment can make significant savings in capital expenditure, which can be anything from £250,000 to several £million for our clients. Savings of this magnitude are worth making and can even have a positive impact on staffing levels. It may not be ‘sexy’ – but it is an area where distribution and logistics management can highlight its importance to an organisation” Howie concluded.

Howie first realised the importance of this cost area when advising the bakery industry which was haemorrhaging money through the loss of bread trays. He then looked at whether this was equally true in other industries, including dairy companies and general retailers. He was staggered by the numbers involved and the apparent lack of action on the part of most businesses. “The real problem is how difficult it is for an individual company to address the issue effectively.  The cost of putting a full time national recovery team in place would be disproportionate.’ said Howie. “That’s where we saw an opportunity to provide a solution.”

ACQSYS is a unique asset management business which helps to reduce losses both by recovering missing equipment, and preventing further theft and misappropriation. It employs a nationwide team of experienced investigators and operatives, many of them ex policemen, to locate and recover misappropriated transit assets and return them to their rightful owners. ACQSYS also runs a recovery hotline. ACQSYS also takes it to the next stage, ensuring offenders are reported, potentially facing legal action for failing to release equipment.

“Our goal is to change behaviour by pursuing offenders through the courts – whether it is drivers, scrap metal dealers or other businesses using equipment which is not theirs ” said Howie. “We work purely on a rate per item success fee, which the client only pays when we return the asset – in short the client company has everything to gain and nothing to lose.”

Launched in the autumn of 2011, ACQSYS is already working with businesses as diverse as Dairy UK, Matalan and The Co-Op. In addition to its asset recovery initiative, acqsys also offers security services, asset financing, leasing and fleet management services to support the repatriation side and to take away the capital expenditure pain of replacing stolen assets.

ACQSYS

www.acqsys.co.uk