BUYING GROUP FOCUS: FORTIS
way we are trying to go, by evolving the organisation into something that enhances value for everyone. I think that’s one of the unique opportunity for us in the market place.
In the few years since Fortis was set up, Cope says Fortis has not historically gone out to proactively seek members. Some businesses have approached Fortis about joining – some of those conversations have led to membership, others have not. He says: “There are always conversations, but once you get to a £1.6bn turnover, an extra £30m or £40m business isn’t going to make a step change in the procurement position of the group as a whole. In considering applications, we need to look at gaining strength in other areas, maybe someone who takes us into a new geographical area or who has a specific product expertise that we believe would enhance the group as a whole all those things add value as well as turnover strength. It is also extremely important that we limit the differentials in size between members to ensure as far as possible that needs and challenges for individual members are aligned.
puts them comfortably at the head of the buying group sales league. “Much more important than that is the fact that it puts us not a million miles away from some of our national competitors. “ As an organisation, Fortis is trying hard to evolve the way it works with suppliers, he says. “We don’t want to develop into a four-pound club hammer instead of a three-pound hammer, the better to beat another one percent of rebate out of the supplier with, that’s too short term. Whilst hard no compromise negotiation has its place, it’s an important message for us - that we want to find suppliers who want to work with us and find ways for us all to benefit because that’s how we will all enhance the profitability of our businesses. Forming Fortis was not about creating a new club hammer; we needed more scale, sure, but the scale is not to get a heavier punch but to create additional opportunities. It’s about saying we have a very substantial volume of business here. How we can work with you to make that work better for both of us?”
Cope says the organisation does this by sitting down and managing the process of the dialogue, making sure the right people are in the
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One of the important points is that Fortis is run by the members for the members and that is a core principle for us
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conversation in the first place and expanding that dialogue out from - here’s my volume, what’s your price – to what do you want Fortis to look like and how could it to work for you? If Fortis worked in that manner what could you do in return for Fortis? “If that philosophy is followed, and both parties buy into it, then the price and the details of the deal will follow, and you end up with a good outcome for all. This approach combined with the scale of Fortis means that opportunities for step change can be developed which provide manufacturers with an improved distribution network and cost base and offer Fortis the chance for greater influence and enhanced procurement terms. “If you just start with the deal, that’s all you get. The really important point is that there is no one-size-fits-all but if you start the conversation with how could we work together and make more money and share the benefits of what we create then that conversation every time goes in similar but different directions because no two suppliers or merchants have the same parameters. It doesn’t always work but that is the
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“We can already offer suppliers pretty broad geographical coverage in the UK, although there are always areas we can strengthen, and this might lead us to look at a business that would plug such a gap. Equally, that coverage means we might say that actually we already have three members in that neck of the woods. That’s not to say that we would put a blanket ban on any more and no-one member has the right of blackball, but we would return to the question how would this decision benefit the overall organisation because this must always be the primary driver?” Cope says. Compatibility within Fortis and between its members is also crucial, in relation to strategic direction, and most importantly the people.
Cope says he believes Fortis has both the scale and the breadth of Independent Merchant brands to continue to allow members and suppliers to develop their businesses together in the most profitable way possible. “There will always be subtle variations between Independent businesses but we believe we have the right philosophy and this combined with the structures and processes that we operate and a strong focus on the minimum turnover size of members allows us to operate very successfully with the differences in trading model that our members employ. We are all working to the same goal and from the same understanding which is that together we can benefit each other and our suppliers.” BMJ
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