8 December 2011 | Paul Snell
As Jaguar Land Rover gears up for the biggest recruitment drive in its history, Paul Snell looks at
how purchasing has become the firm’s fastest growing function – and the staff it’s hoping to attract.
Jaguar Land Rover (JLR) is involved in “the biggest recruitment task in the company’s history”. For a business (the Jaguar part, at least) that began life as the Swallow
Sidecar Company in 1922, this is
a significant development.
The company is looking to hire around 1,300 permanent staff, of which 150 will be for the purchasing function. This makes purchasing
the fastest-growing department in the company.
Finding the right people for these roles will be vital if the company is to achieve its ambitious expansion plans. The automotive manufacturer aims to launch 40 new products over the next five years – including this year’s Range Rover Evoque (on which Victoria Beckham acted as a ‘creative design consultant’), and the C-X75, a hybrid electric supercar developed with the Williams Formula 1 team.
To develop these products, the business will invest £1.5 billion a year over the next five years. And
in September, JLR announced plans to build a
£355 million factory in Staffordshire to manufacture low-emission engines.
So the purchasing function has plenty to keep it busy and is now keen to raise its profile. “We are one of the biggest purchasing departments in the country, but nobody knows about us,” Brian Davy, purchasing director, facilities, materials and services, tells SM.
With both marques managed by a variety of different owners before being purchased by Tata Motors for £1.1 billion in 2008, it was difficult to establish a distinct profile, something the team is
now anxious to change. “We have a lot of ground
to make up in terms of promoting ourselves, both
in terms of recruitment and making a splash,”
Davy adds.
Increasing influence
With a multi-billion pound spend covering both direct and indirect goods and services, Davy describes its procurement as a “big deal in UK plc”.
Production purchasing staff handle everything that goes into the car, divided into commodity areas, for example related to interiors or electrical. The supplier technical assistance function works with vendors to drive up parts’ quality. The aftermarket purchasing team looks after the spare parts and accessories that dealers sell to customers. And the indirect team handles “everything not screwed to
the car”, which covers some massive spend areas. “Every car we make has about £170 worth of energy in it, so we get pretty serious about that sort of stuff,” he says. To put it into context, the company sold 231,621 vehicles last year.
Purchasing has been undergoing a transformation and playing a growing role in the business. Judges at this year’s CIPS SM Awards gave the group a ‘highly commended’ in the most improved purchasing operation step-change category.
“I think it is fair to say that under Ford we had purchasing policies that were fairly traditional, all about gaining scale in the industry,” explains Jacqui Evans, senior purchase manager for aftermarket purchasing. “Under new ownership the business has re-evaluated the best strategy for us. So you’ve seen a complete change. Now, we’re thinking how purchasing is going to best exploit its opportunities and strengths.”
Davy believes that this involves a move away from “might is right” and towards harnessing the power
of brands that suppliers are keen to be associated with. “That is very pleasurable and you can
construct more positive business relationships rather than using scale all the time to drive efficiencies.”
The most important thing is for the department to play a key role in the company’s success in the future. “We have no ambition to be seen as weight in the saddle bag. We want to be making a big contribution,” says Davy.
Evans outlines the growing impact purchasing is having on the business. For example, there is a set of mechanical steps that automatically deploy to help you get in and out of a Range Rover that can be bought as an accessory. These were so popular with customers that demand couldn’t keep up with supply, resulting in a long customer waiting list. A buyer was tasked with working with the supply base to tackle the issues. They arranged components with vendors in Sweden and the UK, and invested £100,000 in extra tooling to boost capacity.
“That action meant we increased our capacity
such that it brought an extra £5 million of revenue over one year,” says Evans. “That’s the action of one person, over three months in my function that was able to satisfy customer demand and it was a great result for the business.”
Skills search
The company is looking to recruit buyers to work across the function and is searching widely for candidates – including category experts who have worked outside car manufacturing.
“When we were agonising over how to describe the roles in the recruitment process, we picked up on this soundbite: ‘If we could find a Harrods’ china buyer or cut-glass buyer, that person may well be ideal for what we want.’ In other words, we’re looking at candidates from broad range of backgrounds,”
says Davy.
This desire to widen the range of experience coming into purchasing is partly because the
team recognises the UK automotive industry will
not provide a deep enough pool of candidates to
draw from.
“Given the size of the task, we are looking for people who might not have an automotive background, or an automotive purchasing background,” says recruitment manager Steph Stephenson. “We are looking for people with
strong commercial acumen. They may have been
in a procurement role or on the outskirts of a procurement role and are looking to make that
career jump.”
This concept of commercial acumen is mentioned repeatedly. “It all boils down to the core technique of standing up in an advocacy role for your company with a supplier, not necessarily in a confrontational position, although that does arise,” says Davy.
“They need to be big enough and grown up enough
to handle that. We need to find people who have potentially got that core skill, or the potential
to acquire it.”
Taking responsibility
With an average spend managed of around
£55 million per procurement professional, Davy says staff are given as much responsibility as they can handle. “We try to force responsibility down the organisation as much as we possibly can. So if you’ve got the talent and capacity to handle that, you’re going to have a hell of a ride.”
Much of JLR’s growth is coming in emerging markets and purchasing is establishing a foothold in these regions, with the goal being to create an international “network of purchasing competence”. Evans says the idea is to develop buyers’ understanding of the firm’s markets and customers. “So being part of purchasing, you get to experience the vast organisation that is out there.”
Retaining staff is also crucial, so career development is important. The company is funding CIPS training for 20 staff. And leadership development is also provided in addition to purchasing skills such as negotiation or commodity-specific training.
Attempts to develop the next generation of buyers are also underway, with visits to universities to explain what purchasing is, a graduate programme and a placement scheme for undergraduates.
“This will hopefully feed our graduate recruitment
in the future,” says Stephenson. “They will get back into the universities and start talking about JLR purchasing as a place people will aspire to work.”
Visits from the prime minister, deputy prime minister and business secretary this year have highlighted JLR’s importance as a UK manufacturer and employer. Understandable when, in addition to its 19,000 staff, the company’s supply chain employs around 140,000 people.
The company spent £2 billion with UK suppliers when developing and building the Range Rover Evoque and chief executive Ralf Speth said this
was “just the start” given the ambition to introduce 40 new products in five years. “This represents
a tremendous opportunity for UK suppliers to
work in partnership with Jaguar Land Rover
to really strengthen the supplier base in this
country,” he said. In recognition of their
contribution, major suppliers on the Evoque
were invited to the launch event.
“We’re looking for UK manufacturing to step up and win contracts on merit with us,” says Davy. “We are looking for the best suppliers and I think there is a whole world of opportunity to take advantage of the fact that we are flourishing as a business. We welcome them beating a path to our door.”
The expectation for vendors is that they will be globally competitive, but will be treated fairly and with respect. Davy recently returned from Germany where he met capital equipment suppliers. “It was
a great week, which is indicative of the fact that
we have a big future and a desire to go and develop those products.”
