21 September 2006 | Paul Snell

Royal Mail Group is overhauling its procurement department, with many staff set to leave and others in line for significant pay increases.

Departures are expected among the 100-strong team as a result of buyers being relocated from 10 sites to three. Offices will now be based in London and Chesterfield, with a satellite location in Milton Keynes.

Salary rises have been made possible by a £2 million boost to the current procurement pay budget of £4.5 million. The board has agreed the increase to bring pay in line with "the real market level".

The changes are part of the group's Procurement Transformation Project, a radical revamp of the way it approaches buying. The project is targeting savings of £300 million over five years on its £2 billion annual spend.

Procurement aims to meet this target by upping investment in personnel skills and development, streamlining processes and making greater use of technology.

In an exclusive interview with SM, group procurement director Ninian Wilson said the aim of the relocation was to improve the staff's ability to work together. "The geographic dispersal means some members of the team have not met everyone else and that's not the way I like to run. I like people to feel part of a team and make sure they are interdependent. It's no good if I succeed and he doesn't. All that means is we both fail a little bit."

He said the decision had been difficult, since many staff would not want to relocate. "There will be people who decide they don't want to do that, so we'll end up with quite a gap in terms of the number of positions. Next month we'll be launching one of the biggest recruitment programmes undertaken for procurement in the UK."

Wilson wants to recruit the best purchasers he can. "I'm after top-quartile people with top-quartile performance. I'm going to be fighting for staff just as everyone else does," he said.

Royal Mail has received more than 100 responses to the notice placed in the OJEU in July for procurement consultants (News, 20 July). The applications are being short-listed to seven to 10 companies. A winner will be selected by the end of September.

A full interview with Ninian Wilson will appear in the 19 October issue of SM.

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