15 February 2007 | Antony Barton
The Carphone Warehouse is establishing a global procurement group to cover its entire operation.
The group is to be based at the company's headquarters in London and will eventually control £1.4 billion for more than 2,100 stores in Europe and the US.
The investment in strategic procurement has been prompted by rapid growth at the business, where turnover has reached £2.5 billion in 15 years.
All spend will go through the procurement group, including any contracts with total value over £100,000. For any purchases below that sum the team will offer assistance such as providing contract templates and negotiation strategies.
David Loseby, who became head of group procurement in November, told SM
a full team of 25 staff should be in place soon after May.
The group currently has 11 members but is already functioning on behalf of the whole company. Loseby admitted it was managing in a "suboptimal way". He added: "It's challenging with so few staff. How do you eat, sleep and work when you need twice as much time as you've got?"
The additional members will allow the team to focus on strategic processes and to achieve its £20 million savings target for the first financial year. Loseby worked with the principle stakeholders, including chief financial officer Roger Taylor, to formulate budgets, agree targets and decide where to focus on savings.
He predicts large savings from new approaches to marketing, information services, offshore manufacturing and telecommunications' networks and connectivity.
The team's main hurdle will be to educate other staff on the role and importance of procurement. Loseby said: "It will be an educational process to ensure people understand what we do and how we can add value."
Since his appointment, Loseby, a CIPS fellow and previously a purchasing consultant, said his greatest challenge has been to familiarise himself with the company's data and understand "what it spends, where it spends and who it spends its money with".
Carphone Warehouse saw 19.8 per cent growth in retail revenue for the 13 weeks to 30 December 2006, and opened 149 stores.