Buying team goes world class

6 June 2010

8 June 2010 | Lindsay Clark

The procurement team at Sainsbury’s has completed a transformation project that has lifted its ranking to “world class”, according to the Hackett Group’s independent benchmark.

Without assistance from external consultants, Sainsbury’s purchasing department has gone from being classed as an “efficient” organisation two years ago to one that is now both efficient and effective. The supermarket also saved millions of pounds, but would not give details.

Explaining the decision not to turn to outside help, head of procurement David Brooks told SM: “We thought we would get effective buy-in if we self-delivered it, rather than using consultants. Since then, one or two other CPOs have said that [business change] is more effective if you can deliver it yourself, but it does require more commitment from the team.”

After the initial Hackett benchmark, Sainsbury’s identified 13 “workstreams” in need of improvement, including training and development, SRM, risk management and market intelligence. Responsibility for these was handed to the six category managers and “Project Darwin” began, involving 44 buyers.

After 18 months teams met their deadlines at the end of 2009. The results of the latest Hackett benchmark showed improved performance in cost savings as a proportion of spend, the extent of procurement’s involvement in planning and budgeting, the degree of spend visibility and the proportion of analyst time spent collecting and compiling data.

But these measures were only a part of the project’s success, Brooks said. “If the CEO asked me what Darwin achieved, it would be saving per buyer, supplier relationship management and stakeholder management.”

To improve spend visibility and make buyers’ lives easier, Sainsbury’s invested in procurement technology including an e-sourcing tool, spend analytics, market intelligence software and a contract repository tool.

Nicki Perrott, Sainsbury’s category manager for trading, emphasised how the project had brought the procurement team closer together, and would benefit recruitment.

“If you can show the team the progress you’re making and keep them excited, you’ve got a much better chance of retaining them.”

Last year, Sainsbury’s won the overall prize in the CIPS Supply Management Awards and the “best contribution to corporate responsibility” category for its work on anaerobic digestion of food waste to create methane fuel.

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