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24 July 2014 | Will Green
The head buyer at Calor Gas has said implementation of a new e-procurement system provides the opportunity to make savings, reduce the supplier base and introduce “cultural change” in the business.
Kevin Wing, group purchasing manager, joined the firm two years ago with a “wide remit” to make changes, and top of his list was introducing e-procurement.
He said the company was beginning a process of channelling its £150 million annual indirect spend through the portal, beginning with the transport and engineering divisions, which represent around a third of transactions.
“We are using the refresh we’re doing with the launch of the e-procurement portal as a vehicle to adopt cultural change within the business,” said Wing.
“It’s been cathartic because people’s understanding of the whole end-to-end purchase-to-pay cycle is better than it has ever been.
“My mantra is we want to create an environment where the easiest way of purchasing is actually the right way.”
Wing is in charge of a team of 10 but he is happy to let stakeholders make purchases, though currently there are “perhaps too many people with access to the finance systems to raise purchases”.
“It’s not about building empires and doubling the size of my team,” he said. “I am very keen, with controls and training and the right systems and processes in place, to allow customers to self serve. Initially our target was to halve the number of people who purchase, but also give them some better tools to do that purchasing correctly.”
Wing said over time more and more suppliers would be added to the portal, with the ultimate aim that all spend would go through it. “Over time it will come to a point where it will flip and we will say well, actually we need to switch off the old routes in, but that’s a way off yet,” he said.
This process will also provide the opportunity to cut the number of suppliers from the more than 2,000 Calor currently deals with. “I’m hoping to get that down to well under half,” said Wing.
He said he had a challenging savings target but sustainability was “number two on our agenda” as the firms expands into other energy areas such as renewables.
“LPG is not going to be around forever and it is refreshing to work in an organisation that is looking at alternative energy,” he said.
Calor Gas is using e-procurement software provided by Wax Digital.