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18 April 2013 | Paul Snell
Purchasers at Hitachi Rail are acting as ‘decision enablers’ to give stakeholders a greater understanding of what they spend.
According to procurement director Jamie Foster, the aim is to make stakeholders more aware of their spending decisions and to take responsibility for them.
“It is about moving [helping] the internal stakeholders to understand what they are going to spend, that they understand they own the responsibility for that,” he said, speaking on a panel discussion at the ProcureCon Indirect conference in London yesterday.
“What we are trying to do in indirect [purchasing] with the stakeholders is not to have procurement as the decision maker at all. In the direct sphere, I think procurement should take the role of the decision maker, but what we are doing inside Hitachi Rail is being a decision enabler: giving people enough information and enough data to make the informed decision they are going to make about what they are going to spend.”
He likened the role to that of a cartoon angel and devil on the shoulders, providing guidance.
“It’s not about saying you should use this company or you should do this it’s cheaper, it’s about saying ‘if you want to go down this path, this is what it means to you, this is what the impact is’. The main aim of that is to get everybody to be the indirect category managers.”
Hitachi Rail won a £4.5 billion UK government contract as part of a consortium to build 596 railway carriages under the Intercity Express Programme. The business is effectively a start-up company in the UK, with 25 employees in 2011, but it is expecting to employ 1,500 by next year.
As part of the same discussion, Les Ball, vice president of supply chain management at engineering business Eaton, said buyers should lean on their boards to get support to tackle new spend areas.
“We shouldn’t really be aiming for 100 per cent of spend under management because we would need an army of police to be able to do that. But certainly don’t leave any stone unturned of your major spend categories or major commodities. And don’t let your organisational leaders try and protect certain levels of spend they don’t want you to touch because invariably there is a big opportunity there,” he said.
“One of the influencing factors you can have with the board is getting them to uncover those untouched areas, which will probably yield significant savings and probably reduce total cost.”