Stanley the dachshund has helped Vitality's brand image
Stanley the dachshund has helped Vitality's brand image

Vitality case study: How to conduct a supplier review

The insurance firm’s rebrand – with Stanley the dog – prompted a supplier survey with positive results

A year and a half ago, Vitality decided to do a 360-degree review of its supply chain. The health insurance firm had recently restructured and re-branded, and wanted to have a clear idea of what its relationships with suppliers were like.

Sourcing and supplier managers Duncan Campbell-Marsh, Frances Cooke and Chris Wilson sent out surveys throughout the organisation and to suppliers, asking about activity between the suppliers and Vitality. “The whole point of it is that they have to be honest – otherwise we’re not going to achieve anything from carrying out the survey,” says Campbell-Marsh.

The honesty did reveal an issue. Two suppliers – both providers of physiotherapy services – weren’t being paid properly. Claims were being hindered by the systems in place, unpaid invoices dating back two years, and it was putting a block on the suppliers’ ability to meet their service objectives.

Vitality pulled together a project team, including invoice specialists and several members from each of the teams involved, to work through the debt on a weekly basis until it was settled. “That was the honesty that was needed,” says Wilson.

“The positive thing is it’s now a case that everyone turns around and says, ‘this can never happen again’,” Wilson adds. It is also unlikely to happen again because, as a result of the action taken after the 360, Vitality now has the systems in place to ensure supplier invoices always go through.

The team also conducted a supplier segmentation exercise to establish its priority categories. Clinical was important on the health insurance side of the business, as were marketing and IT. “Marketing is important because of the expense of putting Stanley out there on the billboards and the Tube,” Wilson says, referring to the brand’s now iconic sausage dog.

IT has been growing in importance as Vitality moves its user experience away from phone calls and towards digital and online. “As much as we can process automatically, we try and do,” says Wilson. “IT has a huge role to play in that because of the migration of insurance claims systems that we’ve done over the past couple of years.” Vitality has consolidated three separate IT platforms into one in the last few years.

Keeping suppliers on side is important for Vitality. “You want to be that best client,” says Cooke. “You want them to be a partner. You want them to work with you, you want them to understand your business intrinsically so that they’re thinking for you.” That’s one of the reasons the firm started holding its own supplier awards.

“We demand a lot from our suppliers, we constantly ask them to innovate. So if they can know a lot more about what we’re trying to do and our aims and objectives then that gives them the guidance to be able to go and innovate,” says Cooke.

At end of the day, says Campbell-Marsh, no one knows more about their marketplace than suppliers when it comes to insight, trends or best practice. When suppliers decide to share that expertise, “Hopefully we’ll be on the top of that list,” he says.

They came, they saw, they supported the event

Two years ago, Vitality launched a supplier awards ceremony, as an opportunity to celebrate the successes of suppliers and also to share with them the aims and objectives of the business. What started as a zero-budget affair has now grown into being hosted in a London hotel, with speakers from the business including the deputy CEO. “[The first year] we ran it by ourselves with support from our director Mike Saunders,” explains Chris Wilson. “Then we managed to get our chief executive Neville Koopowitz and our Vitality Programme director Nick Read involved. “They came on, they saw what a great ceremony it was and decided then to back it financially and they’ve given us the support.”

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