29 March 2001 | Liam O'Brien
Retail giant Wal-Mart is to use its UK purchasing team and British practices to spearhead a pan-Europe buying operation.
The company will target its German stores first and expects to reduce spend on store equipment and non-resale goods by up to 40 per cent, according to Nick Burr, Asda Wal-Mart's new head of commercial operations in Europe.
Two German managers will join Asda Wal-Mart's four British purchasing staff. Procurement areas have been prioritised and given a ranking of one to three, with one denoting the most pressing areas and three the least.
"At Asda, we succeeded in getting the number of suppliers down from 8,500 to 1,000 and it is this experience that we want to replicate across Europe," Burr told SM.
One hundred of the 1,000 suppliers represent 85 per cent of the £1 billion annual procurement budget. "Our remit is to take cost out while delivering the best value to customers," said Burr.
Asda Wal-Mart's 245 UK stores currently buy 3,500 lines from a total of 60 suppliers.
The company is aiming to get rid of duplicate staff and to put a slimmed-down procurement operation in place across the UK, German and other European markets as the chain further expands.
Burr said: "At present, there are two buying functions - one in Germany and one in the UK. If we have a buyer in both Britain and Germany for uniforms, we're not really going to need both."
The Asda Wal-Mart team expects the first cost benefits to feed through from the beginning of June. In July, there will be a review of progress made and a decision taken on whether to take on additional procurement staff.