25 August 2009 | Jake Kanter
BOC are set to crack down on compliance to deliver more savings and improve operations.
As part of an ongoing transformation of the firm's UK and Ireland procurement department, purchasers are set to become more demanding and secure a greater influence over the company's spend.
John Needell, head of procurement at BOC, told SM: "2008 was about achieving credibility in the business, starting to alter how they work and shift attitudes towards us. This year is about continuing to deliver, but starting to push that bit harder on changing the business itself to comply with processes."
BOC's UK and Ireland operations have an annual spend of £400 million. Procurement delivered £6 million of savings last year, following the department's restructure in 2007 as a result of BOC being taken over by German industrial conglomerate The Linde Group in 2006. This year, purchasing plans to cut costs by £11 million.
Needell said the department is ensuring the company uses established processes correctly - such as procurement cards and contracts with preferred suppliers.
"My view is that we are a support and service department but if we have credibility, respect and can be shown to deliver, then we have every right to tell the business how to do it," he said. "We are being more challenging, and as long as we keep delivering we will keep challenging."
In some cases this means cultural change. "If a stakeholder says 'I've used this supplier for the past 72 years and they're my best mate,' we have to say: 'No, you're not going to use them, you're going to use a different supplier because we've selected them through category management'."
Needell said this approach is already proving successful, for example, in the purchase of gas compressors. Divisions in the UK used to have an uncoordinated approach to purchasing equipment. Now they are managed on a country-wide basis with the help of procurement.
Efforts to improve compliance have also been aided through greater internal communication. This includes attending more meetings and "putting a lot of time and effort into an intranet site focused on non-procurement people". In addition, the team has created a quarterly internal newsletter, which highlights changes and useful tips for stakeholders.