27 March 2008
Purchasing at international publishing firm Reed Elsevier is to be transformed under the direction of its first global chief procurement officer.
Leslie Campbell, who was brought in last September from computer manufacturer Dell, is leading the centralisation programme as part of an attempt to save £245 million by 2011, with expected annual savings by then of £100 million. She would not reveal what percentage of that sum purchasing will be responsible for, but said it is expected to make a "significant contribution".
"By consolidating procurement you start to do it better. As we get better we will be able to deliver more with less. Instead of the strength being divisional, the strength will be in categories that cut across all of the divisions."
Buyers based in different locations will now report into a central team.
Campbell, who has led similar projects at Dell and at software firm Oracle, will focus on four areas - cost savings, centralisation and globalisation (buying overseen centrally but sourced from many countries), financial controls and "employee experience" (the training and development of buyers).
Some savings could be achieved through more low-cost country sourcing. "We're doing business with China and there are lots of things we can do in India," she said.
Campbell is to recruit staff with category expertise, not necessarily professional buyers, to boost team numbers. "I've found the more diverse your team, the stronger it is."
She says in the past this approach has bought the function more credibility within the business.
She also revealed the company has "too many suppliers".
"It is a big concern and therein lies a big opportunity for us to improve the quality and management. If we have fewer, we can manage them better."
She is keen to have "deeper relationships" with suppliers that are "mutually beneficial", but warned there are plans to increase the use of e-sourcing and e-auctions because it creates a "climate of competition and achieves real pricing". She added: "Suppliers be ready. We are going to do a lot this year and beyond."
Campbell also intends to make Reed "a great place" for buyers to work. "We are making sure they have interesting performance plans that inspire them," she said. "We are really committing that in two years from now they will be better professionals than today."