Buyers face a relocation dilemma

27 November 2003
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27 November 2003

Purchasers at Nissan may go on strike against plans to move from Sunderland to Bedfordshire. David Arminas examines the issues for both sides in the dispute

In recent years, Britain's industrial relations landscape has been noticeable for its lack of strikes and industrial stoppages, making it exceptionally attractive to inward investors.

However, the past year has seen that image sullied. The recent problems at Royal Mail are a reminder that industrial relations are in flux. Wildcat strikes brought about a collapse of postal deliveries in many parts of London, forcing purchasers in Royal Mail's client companies to look hard for alternative delivery suppliers.

But the firefighters' strike that took place a year ago was a seminal event. The media was full of pictures of firefighters on picket lines in the cold of early morning. More than any other action, it brought home the fact that industrial relations were in for a rougher ride.

During that strike, it was purchasers who worked hard to get sufficient spare parts to keep the Ministry of Defence's ageing fleet of military Green Goddess fire engines on the road.

This time, however, it is the purchasers who could be the ones on strike, at Nissan's award-winning car plant in Sunderland. Will we be seeing images of wrapped-up buyers crowded around oil drums on a picket line?

As our "news story" shows, the purchasers and their union, Amicus, are up in arms. They are fighting what they see as a forced migration of procurement south to Nissan's research centre near Bedford. Amicus says Nissan has not consulted enough with the union and its members. But Nissan says it has and that generous terms are in place for those who wish to go.

Purchasers in all companies and organisations should ask themselves what strike action will gain them in both the short and long term. Moving homes for many of the purchasers, especially those from the north relocating south near London, can be a difficult personal time for them. Only they can decide whether it is something worth striking over.

However, industrial action raises the wider issue of where purchasing sits among an organisation's management structure and how it can determine the business strategy.

Strikes and other forms of industrial action single out purchasing as difficult to get on with and throw up barriers between them and senior decision-makers from other departments. Before taking industrial action, purchasers should consider to what extent procurement will be included in the processes to change business strategies after a strike.

But most importantly, as one senior purchaser told SM, the Nissan purchasers are flagging up another major issue. He questions whether Nissan should move purchasers away from the production process where its major internal customers are probably situated.

"It is essential that purchasers remain close physically to their most important internal customers," he says. "In Nissan's case, a move from the production facilities to engineering and design could create problems."

The result may be a breakdown in communication and customer relationships, he added. Moving the purchasers south will disassociate the entire purchasing department from the manufacturing process, possibly damaging procurement's reputation to change business processes for the better.

Yet Nissan claims that the move will involve purchasers more closely in the process and at an earlier stage than they are now. This should help Nissan to reach savings targets for introducing new models.

Many procurement professionals believe that being included in the design phase of projects, from construction to manufacturing, is where they can make the biggest contribution to their organisation's bottom line. Indeed, many purchasers fight tooth and nail to work alongside designers.

It remains to be seen what the outcome of the strike ballot will be, when it is announced on 8 December. Even a vote in favour doesn't necessarily mean a strike will follow, but some kind of industrial action may be on the cards.

It may be that Nissan and the purchasers agree on some compromise as a result of the current battle. Possibly only some of procurement will move south and some will remain in Sunderland.

Nissan's purchasers must choose between professional rewards of improved procurement performance and personal rewards and lifestyle. For many of them it will be a hard call.



SMnov2003

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