28 February 2002
High-street retailer Boots is on target to shave £30 million from its annual procurement spend this year, writes Robin Parker.
A 15-month project to centralise and streamline the company's purchasing, to be completed in June, produced £17 million in annual cost savings in the first nine months.
Last January, procurement was charged with making nearly a third of Boots' proposed company-wide savings of £100 million.
It set up a 45-member procurement services unit to centralise and manage purchasing, and to take responsibility for purchases away from more than 100 non-specialists.
Julian Coles, director of the unit, said the company-wide review provided a good opportunity to bring control to the procurement process.
"We wanted to consolidate purchases, raise procurement's profile and bring in strategic category management to move away from purchasing's amateur status," he said.
"We also needed to bring procurement disciplines into areas where there was no purchasing expertise before, such as consultancy and marketing."
The project, co-ordinated with consultancy KPMG, won the prize for strategy and business transformation at the Management Consultancies Association's annual best practice awards this month.