At Primark, procurement is supporting in-store experience ©Getty Images
At Primark, procurement is supporting in-store experience ©Getty Images

Four ways to add top line value

Procurement needs to support top line growth and innovation. That was the message at last month’s ProcureCon Indirect conference. But how?

Embrace agility

Enabling speed to market is critical, said Eavan O’Halloran, director of procurement at Primark. “You have to be agile and put [savings] back into innovation, or your competitors will overtake,” she said. “Speed to market feeds everything.” She used the example of signage in stores: “If we can take two weeks off print it contributes to sales.”

Tom Lewers, head of global supply chain at insurers Royal London, said agility means using suppliers that “wouldn’t get through the typical procurement gateway”. Come up with fast-track solutions or risk missing out. In a previous role, he supported the onboarding of a start-up that was loss making and weak on risk, but had an “extraordinary product”. “We got to market in three months, giving us nine months’ competitive advantage,” he said.

Get involved with customer experience

“We should be contributing to customer experience,” said Danske Bank’s head of procurement innovation Bo Dungal. His team offers a procurement advisory service to the bank’s clients, contributing to customer satisfaction and attracting new customers.

O’Halloran said procurement had a role to play in improving in-store experience. “The days of shopping for hours are over,” she said. “People want experiences: make-up and hair counters, coffee, even cocktails.” Buy smarter to invest in innovations, she said: “We saved £60m on construction, and £10m went back into providing wifi in-stores, improving customer experience and driving sales.”

Be more human…

…And automate the rest. Tactical procurement will be automated, freeing up time for strategy and relationships. “The new procurement person has to be a human being who is able to interact across a range of people,” said Kevin Will, executive director of strategic sourcing at Warner Bros. The function has thinking to do on recruitment, team structure and L&D – are people skills more important than category expertise? Jean Latty, group head of indirect procurement at Generali, asked: “What happens to people doing tactical tasks? How do we convert them to being more strategic?”

Collaborate inside and out

“Never underestimate the power of working together: internal innovation before you partner with suppliers,” said O’Halloran. Understanding process flows means coming up with ideas to improve them. Robert Turner, head of procurement operations at John Lewis Partnership, said internal collaboration on JLP’s Westfield Store freed up enough cash to refurbish the Oxford Street branch for free.

Co-opetition, working with competitors, is increasing. Telecoms firms Vodafone and MTS have been pooling procurement resources for some time, and are working together on a cognitive procurement project. “To improve our companies with new technology, [we have] to cooperate,” said MTS deputy CPO Paolo Baldo.

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