03 July 2008
Procurement professionals can "make or break a business" but calling them in just to salvage a bad situation is a common mistake, according to British Airways chief executive Willie Walsh.
In an interview with SM, Walsh, whose buyers oversee an annual spend of £5 billion, said: "The contribution professional procurement can make to a business is absolutely massive," and this extends even to spiralling fuel costs. "It is not just the raw fuel, there are charges for getting the fuel into the aircraft."
And this difference is "not just when the business is under pressure. That is often the mistake people make," he said. "They turn to procurement when times are tough, but the opportunity for procurement to make the difference is every day.
"That is something we have learnt in the airline industry - we work just as hard at that when we are going through good periods as when we are going through bad.
"You have to ask yourself every day - am I getting value for the money I have spent? Just because you were getting a value for it a year ago or a month ago, doesn't mean you are getting value for it today. Because the supply environment changes on a daily basis."
This, he adds, requires a culture across the buying department. "We try to get people to think of it as their money - would you hand it over if it was your own money?"
But he is clear the most important aspect is value and not lowest cost. "Never seek procurement to find the cheapest supplier because the cheapest is not always the best value."
Willie Walsh will be speaking the night before the CIPS Premier Conference on 6 October. See www.cips.org/premier