Boots CPO remit expanded

21 June 2010

22 June 2010 | Andy Allen

Alliance Boots group procurement director Patrick Dunne has been given the additional role of group property director after leading a successful change management programme at the company.

Dunne has this month taken over responsibility for the group’s property portfolio, which includes more than 3,000 retail outlets, more than 300 warehouses and offices in 20 countries. He told SM his task was to carry out a review of how the group handles its estate from an operational and commercial perspective.

“We’ll look at the people, our capabilities and skill-sets, our processes, what’s working well, what’s not,” he said.

Dunne joined Alliance Boots in 2008 to assist with the group’s plan to achieve savings across its £1.5 billion goods-not-for-resale (GNFR) spend.

High street pharmacist Boots and the pan-European wholesale and retail pharmacy group Alliance UniChem merged in 2006.

Shortly after Dunne arrived his team spearheaded a “procurement-led change management programme”. He added: “Our primary role has been to take control of the GNFR cost base rather than just buy new products and services.”

“We’ve been working alongside stakeholders to challenge the balance between cost and service. We set about reinventing the procurement team’s responsibilities. Sometimes value means lower cost, sometimes it’s improved value at the same cost.”

Without putting a figure on savings achieved in the process, Dunne said: “We’ve far exceeded shareholders’ best estimates.”

As part of the programme Dunne’s team has sought to consolidate contracts. For example, where before Boots had five contracts to clean its stores, it now has one. The move has achieved consistent quality at lower cost, he said.

Boots has also sought to manage cashflow risks throughout the supply chain, in high-risk areas such as construction where it has secondary and tertiary contractors, Dunne said. “We’ve made sure that everybody in the room is financially secure and that cashflow isn’t an issue.”

As a CPO whose role has a scope matched by few other procurement professionals, how does Dunne see the function evolving?

“There are some people who have really demonstrated over the past year or two that procurement can have a strategic role within an organisation challenging the operating mode of the business,” he said.

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