6 October 2011 | Paul Snell
Category: Most improved purchasing operation – start up
Winner: Adelie Food Holdings
By adopting a strategic approach to purchasing in three careful stages, Adelie Food Holdings has seen huge cost savings as well as a cut in supplier numbers
Over the past 18 months, procurement has become a key ingredient at Adelie Food Holdings. According to the company’s chief executive, the purchasing team under the leadership of group procurement director Sebastien Hernandez has “fundamentally changed the way we buy”. Adopting a strategic approach to purchasing has brought numerous benefits, including £9.7 million cost savings and a cut in supplier numbers by 41 per cent.
In September 2009, Adelie’s owners, private equity firm Duke Street, and the group’s chief executive Chris Thomas, decided a professional procurement function was needed. Hernandez – the 2005 CIPS Young Purchasing and Supply Professional of the Year – was hired and given targets for the new function.
These goals included: developing a sourcing strategy; making the most of the company’s spend; saving 10 per cent within three years; acting as a ‘change agent’ across the business; and boosting the firm’s commercial offering with its customers.
The establishment of the function took place in three stages, and each of these was divided into ‘people’, ‘processes’ and ‘systems’ to identify the actions.
The first stage – ‘tactical alignment’ – involved building the foundations. This included winning the support of senior management and stakeholders throughout the firm. A procurement charter was implemented, which demanded the involvement of procurement on all corporate contracts and material spend. Processes and a governance framework were also introduced, and an IT system developed to analyse spend data.
The second phase – ‘strategic alignment’ – focused on improving skills, deploying category management and influencing the commercial and product development parts of the business. As 90 per cent of the team were new to the business, a competency framework was drawn up, and training in procurement and soft skills provided.
The introduction of category management was the backbone of the transformation. Each category, which is reviewed regularly, has a dedicated leader. The firm also holds category workshops twice a year, where decision makers from across the business come together to share ideas.
The third stage of the transformation, which the company is currently engaged in, is to achieve ‘best-in-class’ status. This incorporates launching supplier relationship management with key vendors, develop an ‘innovative and creative’ culture among suppliers and earn CIPS accreditation.
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