Procurement goes global at SABMiller

25 November 2009

25 November 2009 | Carly Chynoweth

Brewing giant SABMiller is set to save £180 million a year by 2014 by centralising the management of three departments - procurement, HR and finance.

A spokesman for the company, the world's second-biggest beer producer, known for brands such as Miller and Grolsch, said the new, global approach to the running of these departments "will simplify the management of our local businesses, enabling country management teams to concentrate on winning their local markets".

He would not give details of how much of the planned savings will come from the procurement changes - or the specifics of what those changes will be - although he called the business case "significantly positive".

The changeover will be managed by spend category rather than by geographic region. It will begin with a pilot programme involving a small number of categories in January 2010, before expanding significantly by the middle of the year. Details of which categories will transfer when are yet to be finalised. The complete transition will take several years.

Asked if the changes would result in job cuts, he said: "Our business case is not based on reduced headcount, be it through outsourcing or redundancies. We do anticipate that roles will change in scope and, in some cases, location. There will be significant increases in job scope for the global category lead roles." Which roles would be affected and the extent to which jobs will change will be announced "in due course".

Changes in procurement will be underpinned by a software system that will operate through a new Switzerland-based and wholly owned subsidiary company called "ProCo". This will run on the firm's existing SAP software system until a permanent solution is found. The spokesman said that because it is a new company located in Switzerland "it is envisaged that the ERP [enterprise resource planning] systems will be outsourced, but a final decision has not yet been taken as to whom this will be outsourced to". The changes were announced last week alongside interim results that saw the brewer's pre-tax profits fall 26 per cent to £893 million in the six months to 30 September 2009. However, Graham Mackay, SABMiller chief executive, said underlying performance had been strong and the company had increased its share in a number of markets.

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