13 April 2010 | SM reporters
Three major outsourcing deals have been revealed in the past few weeks.
Monarch Airlines is outsourcing catering and in-flight retail services to onboard retail supplier Alpha. Under the terms of the three-year contract, Alpha will manage an annual spend of more than £80 million. It will take control from early May in a bid to save money and increase customer satisfaction. The cost savings Monarch hopes to achieve were said to be “significant”.
Monarch CPO Craig Cherry told SM: “This will free up a lot of time for us in procurement because at the moment we have 60 or 70 suppliers to manage, but now we will only have one. We have no doubt it will be a massive success.”
Two other deals have been set up with business services company Xchanging. Pallet and container pooling services firm CHEP has awarded a five-year contract under which Xchanging will manage an annual spend of £75 million. The contract includes non-core categories and a large proportion of procure-to-pay activities.
Xchanging aims to reduce overall non-core costs by integrating and standardising processes for CHEP’s business across the UK, France, Germany and Spain. Marcelo Di Benedetto, sourcing and quality director at CHEP Europe, said: “We expect a number of benefits including increased efficiency and reduced costs.”
Defence electronics firm Selex Galileo has outsourced indirect procurement to Xchanging in a three-year contract. Xchanging will manage an annual spend of about £17 million of the company’s UK operations. It will be responsible for categories including learning and development, travel, furniture and freight.