19 October 2000
Construction giant Laing is aiming to reduce its number of core suppliers from 23 to 12 by the end of the year, as part of the final stage of a major supply chain revamp.
Laing has gradually reduced the company's 496 mechanical and electrical suppliers to 23, which supply 80 per cent of the firm's needs.
"We want to reduce our supplier database to known specialists," said Keith Airey, Laing's head of procurement, who was hired in September to restructure the division. "We need to move away from the adversarial approach to supplier relationships and promote partnering. Procurement was a neglected, unloved and a largely administrative and logistical function," he said.
Airey has tackled indirect spend, slashing £224,000 from an annual photocopier outlay of £600,000 by renegotiating contracts. Telecoms suppliers provided a further £300,000 of savings. "Tackling indirect spending was a way of getting management trust and buy-in," he said. "Now we want to start on direct construction spend."
The move is part of a radical shake-up of the loss-making construction business, which lost £26 million as a result of cost overruns on the controversial Cardiff Millennium Stadium.