While an international scramble for protective clothing looks set to dominate the headlines for weeks to come:
CEO of the PCIAW® (Professional Clothing Industry Association Worldwide) Yvette Ashby was concerned at the lack of scrutiny of suppliers. Armed with the latest Plimsoll analysis of suppliers, Yvette went live on BBC News earlier this month to warn of the dangers of buying blind.
The Plimsoll Analysis www.plimsoll.co.uk is used by senior decision makers at some of the world’s leading companies to give them the intelligence they need to make sense of the markets they operate in.
The Cabinet Office relies on reports from Plimsoll and guidance from the PCIAW®, but in the desperate rush to find PPE, some orders by some organisations were placed with unknown suppliers or not fully vetted suppliers. The PCIAW® has been encouraging the mobilising of an enormous increase in production of PPE; but Yvette knows only too well the inevitable disappointment buyers could encounter, sometimes with six figure sums being lost on single orders.
“All of the losses were preventable if the Plimsoll rating had been checked – it takes seconds. We are desperately trying to protect buyers from losing hundreds of thousands of pounds on PPE from dubious suppliers, who are not expert suppliers of this specialist type of PPE. There are too many dangerous risks been taken by companies who are not specialists in disposable PPE, suddenly trying to reinvent expertise and specialism that takes years to develop in a company. This results in avoidable large scale problems,” Yvette says. The old adage “Let the buyer beware” has never had such resonance.
“This pandemic can numb us to numbers, yet it is impressive just how many billions units of protective clothing have been ordered. The Plimsoll analysis of the companies involved confirms the boom is real – in the UK and around the world. Buyers are now paying attention to the Plimsoll line like never before and we are optimistic for the future of our industries more stable companies. The old idea of looking at historical revenue figures, without considering the underlining strength generated by growing net assets, generation of cash and profit, the risks posed by the client base and the all-important positive growth in the Plimsoll line cannot continue.”
Plimsoll reveals that industry growth at 9% was already very good prior to COVID-19. Some firms were starting to grab market share aggressively – 285 pushed sales up 25% last year on average. 27 of these fast-growing firms have sales above £10 million. However, aggressive tendering practices were weakening the whole manufacturing base with margins averaging 3.3%. Buyers were dictating unsustainable terms and not paying attention to the financial health and the likely future financial health of the prospective supplier.
Hunter Apparel Solutions Limited (Hunter) founded in 1936 is a well-respected supplier who has shown flexibility by massively increasing PPE production during the temporary downturn in the corporate wear side of their business directly linked to C19, and in doing so has supplied millions of units of PPE to the front line. Hunter has already contracting arrangements for disposable PPE prior to C19 and so was in a strong position to respond to emerging higher volume needs.
Many other suppliers were weakened in recent years by under-pricing their tenders for large contracts and endangering the entire industry by too-good-to-be-true prices. Regular Plimsoll analysis of all industries during the crisis provides the clearest view yet of the boom in orders to the 800 firms comprising the workwear and PPE industry. The top 100 players were expecting sales of over £10m this year even before the pandemic.
However, on the first day of lockdown in the UK 16 of those firms were in financial danger, possibly due to unsustainable pricing policies.
“The British military transport plane waiting on the tarmac in Turkey for PPE became an industry symbol of the pandemic and has instilled the term ‘PPE’ in the public’s psyche forever.”
The PCIAW®’s usual role is to create as many business opportunities as possible for its members that provide a safe environment for education and networking within the industry. As well as the forums that usually take place throughout the year, the PCIAW® runs an annual Summit and awards where buyers can feel free to interact with suppliers.
As part of a drive to give back to the buyers, PCIAW® offer every buyer who applies for FREE membership and either uploads their tender to www.PCIAW.org OR registers and attends the first networking event; a FREE copy of the first ever beautifully illustrated 104 page Buyers’ Guide, written in collaboration with Charles Conway. Charles has had over thirty years’ experience working with some of the most experienced buyers within the industry. The Buyers’ Guide is designed to offer easy-to-use, practical solutions to difficulties in the tender process for both buyers and suppliers. The PCIAW will also offer to facilitate links between buyers and Plimsoll so that more informed decisions can lead to better results in this sector in the challenging period ahead, when much more robust forward looking due diligence will be required.