Structural changes

Buhrmann details its new structure for Corporate Express North America including a specific focus on the mid-market

Buhrmann has announced an organisational restructure of Corporate Express North America. The new streamlined service, which will be effective from 1 July 2006, is designed to improve customer and product line focus, accelerate sales growth and drive cost efficiencies.

A key element will be the creation of a dedicated commercial OP organisation to focus specifically on the mid-market and local customers – the traditional sweet spot of dealers. The new structure will replace the current geographic profit centre approach in the US.

Buhrmann insists that the switch-over in structure will not impact its service levels. Media relations manager Peter van Boesschoten told OPI+: "Corporate Express is committed to continuing to serve customers in the communities it operates across the US. The local sales and distribution operations in our 28 markets will remain in place, resulting in a seamless transition for our customers."

Announcing the move, Buhrmann CEO Frans Koffrie said: "While the current structure has served us well in building and integrating our North American operations, this new approach provides the opportunity to move the business to a heightened level of performance in terms of customer service and cost effectiveness."

The restructure will result in the elimination of some management positions and the continued centralisation of functional activities. Around 200 jobs are expected to be cut as a result of the restructure.

Buhrmann denies that the changes in management will leave a hole in experience and ability. van Boesschoten said: "Corporate Express is making these changes from a position of strength, to reinforce our market-leading position and for the long-term benefit of the company. These changes substantially retain the continuity, talent and experience of our senior sales, operations and management leaders."

The Buhrmann spokesman also insists that the decision to make its furniture and facility supplies business standalone is a logical step. He explained: "Customers clearly appreciate our broad product offering. Growing numbers of them are buying in to the cost and time savings and the convenience that arises from concentrating purchases such as furniture and facility supplies through a single supplier. So creating separate businesses is a logical step – although Corporate Express remains one company with the same goals – and allows us to raise the standard for customer service. We continue to provide customers the ability to place one order, receive one invoice and process one payment over our product lines."

This latest move from Buhrmann comes hot on the heels of its centralisation of customer care and local administrative operations.

Annual savings are estimated to be in the region of $30 million, and $10 million of this is expected to be achieved in the second half of 2006. One-time costs of $55 million, covering severance and other costs will be incurred, of which $25 million will be reported as exceptional costs in Q1 2006.

Buhrmann added that the centralisation of back-office functions, announced in November 2005, is "progressing well" in terms of schedule and expected benefits.

With Office Depot and Staples already heavily targeting the mid-market, Buhrmann’s announcement that the new structure will help it to take a bigger bite out of this sector will provide more concern for US independent dealers.

Detailing its plans, van Boesschoten added that Corporate Express would focus its mid-market sales on business development and customer penetration and retention.

He added: "This sales structure targets customers and prospects that can benefit from Corporate Express’ core competitive advantages. Corporate Express offers mid-market customers and prospects a local sales presence, customisable ordering and personal attention. With a unique multichannel product and furniture offering, an extensive private label range, competitive pricing and a global presence in the marketplace, Corporate Express is well positioned to grow in the mid-market."

More food for thought for US dealers.