Royal Mail chief to share insights at conference
Making the right moves
Buyers say privatising Royal Mail would benefit procurement
New Royal Mail top buyer sees opportunity in crisis
Royal Mail appoints new CPO
☛ Want the latest procurement and supply chain news delivered straight to your inbox? Sign up for the Supply Management Daily
7 October 2010 | Angeline Albert
Fried breakfasts are among the success stories for Royal Mail Group chief buyer Kath Harmeston.
The group procurement director counts this somewhat unusual (yet highly emotive spend area) as one of the procurement successes achieved since joining the group in 2009.
She told the audience at the CIPS Annual Conference yesterday, I was warned “not to touch the bacon sandwich,” as part of a programme that has reduced the catering subsidy by 60 per cent.
Describing several more conventional spend areas, she said the group has a £2.3 billion spend of which £1.7 billion is addressable. She said over the past four-to-five years, procurement had cut costs by more than £600 million.
Her approaches included low-cost country sourcing, which “was challenging operating under the public sector”, but had delivered 60 per cent savings. Harmeston said the group used to have unique specifications for parts and paid £360 per bicycle. Now each bike costs $60 (£38) and is sourced from China.
The CPO said her 88-strong buying team had “demand-choke” ability. By looking at discretionary spend – consulting, marketing, travel, the demand team flag up spending to finance to approve or decline. This approach has already managed to choke £12 million in the first quarter of this year.
The CPO said after the group separates from the Post Office, procurement will be operating as a service provider to them and will be able to offer services to other public sector organisations in future.
☛ For more details see the live blog from the conference on 6 October.