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12 May 2011 | Lindsay Clark
The procurement team at Surrey CountyCouncil has achieved £21.5 million savings in the financial year 2010-11 and has set ambitious targets for the year ahead.
Andrew Forzani, head of procurement and commissioning at the local authority told SM the council expects to make savings of between £25-30 million in the next financial year as procurement gains greater influence on spending decisions.
Before 2008, Surrey’s procurement function was run from within the business units with about 20 people. Since then, the team has been centralised and been restructured twice, each time based on a business case justified by costs savings, he said.
“We have just delivered £21.5 million cashable revenue savings, in the financial year just finished – that’s not a bad return on investment and we are targeting £25-30 million savings this year,” Forzani said.
Now the team is run with 49 full-time-equivalent procurement professionals.
Although the team has now been successful in saving money, it has been a struggle to gain more influence within the business, a typical challenge for the public sector, Forzani said.
“I think that although procurement as a profession has come to the fore in the private sector and is seen as a key aspect of good financial management, business change and making efficiencies, that has been quite slow to come over to the public sector, and even where it has, we have probably sat in a ‘traditional box’.
“I know a lot of public sector procurement people struggle to get their organisations to understand the difference between purchasing, running tenders and placing orders and doing proper strategic procurement and category management.”
Thorough benchmarking against other organisations gave the team the credibility to challenge assumptions in business units, and led to successes in highways maintenance contracts, such as their 2010 CIPS SM award winning streetlight-buying strategy. Once department managers could see the savings procurement was achieving, it helped the team achieve greater influence in other areas, such as social care, Forzani said.
☛ Andrew Forzani will be speaking at The PublicProcurement Show, where Supply Management is an official media partner, in London on 14-15 June addressing topic of leadership and innovation.