Pulling it all together

6 October 2011 | Naouel Zenaidi

Category: International purchasing project of the year
Winner: Wincanton

The procurement function at Wincanton was determined to prove that its success in the UK could be replicated across Europe, and that’s just what it did

In 2009, the category management team at Wincanton was managing 87 per cent of the total spend by the company in the UK. Meanwhile, the three in-country procurement managers based in Europe influenced only 9 per cent of European spend across the firm’s 16 operating countries.

After a detailed spend and opportunity analysis, category managers presented to the board their idea of introducing in-country procurement teams in Europe. They were to be responsible for delivering functional excellence into the company’s mainland European business.

The aim was to ensure that all mainland European spend would be addressed by procurement beyond what was required through pre-existing pan-European agreements, with the promise of substantial cost savings.

Key factors were quickly identified which would ensure its success. These included the early engagement of the company’s in-country management teams, the sharing of the UK procurement team’s knowledge and expertise, and a commitment to deliver ‘quick wins’.

With this in mind, European management teams were involved from day one in the recruitment process of the in-country procurement teams, and the UK procurement team shared their established policies and processes.

Quick wins were achieved across Europe by using category expertise gained in the UK. A more flexible purchasing model – more suited to the volatility of energy markets – was, for instance, introduced for energy buying in Germany. Another quick win was to reduce the highly-fragmented supply base for haulage subcontracting by centralising sourcing decisions.

At each step, concerns expressed by stakeholders were addressed. Internal customers were soon able to recognise the value that procurement techniques were bringing to the business beyond the financial benefits, for example, in terms of reducing the risk and liability associated with supplier selection.

Twelve months after the launch of Project Europe, the results were already beginning to show. European procurement teams, who had become part of respective in-country management teams to ensure focus, resource and support, had accessed 20 per cent of European spend, exceeding their target of five-fold return on investment across 50 projects.

By the end of 2010, procurement processes had successfully been incorporated to wider business operations and procurement was now seen as a function in its own right with a skill set capable of delivering significant benefits to the business.

☛ Watch the post-award interview here