Arriva invests £3 million in new procurement strategy

Gurjit Degun
17 March 2014

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17 March 2014 | Gurjit Degun

Arriva is investing more than £3 million in people, training and development and systems to transform its procurement strategy in mainland Europe over the next three years.

In an exclusive interview with SM, the company’s new procurement director for the division David Loseby said the business will take a collaborative approach to purchasing, after its previous attempts to improve procurement in mainland Europe had proved unsuccessful. The division extends over 13 mainland European countries, providing fleets of 16,000 buses, almost 1,000 trains, trams, cable cars and waterbuses, and spends £500 million a year.

Loseby plans to introduce a “matrix organisation” to cover the 13 countries and all categories. “We’ll end up with four regions that will have resources in the country and people within those country resources who are category specialists. For example there will be someone looking after buses in the Mediterranean who will have a counterpart in central Eastern Europe, in Scandinavia and in the Netherlands.

“That way I have got country coverage and I’ve also got my categories being covered across the organisation, and then a thin layer in the centre to coordinate and leverage those activities across the whole of mainland Europe.”

Loseby, who joined the company in September, said he steered away from implementing a centralised procurement strategy because he does not think it “gives the right level of connectivity with the local entities and sufficient understanding of how the supply chains operate within those geographies”.

He said there are three components for a business like Arriva to focus on – people, assets and fuel, so the procurement team will have to be experts in those areas. “The true mark of a good procurement professional is that they can adapt to different industries and sectors because the 80 per cent plus of your skills and competencies are not about knowing the absolute engineering detail of something but the other skills around communication, engagement and understanding risk,” explained Loseby. “It’s about where to get that information, how to harness it and work with specialists.”

For training and development, Loseby said he will pick out people who currently have roles in areas such as fleet, operations or engineering, and train them into procurement professionals. “They know and understand the business and the market and will have been exposed to procurement activity but this is a way of formalising some of those skills but also giving them the ability to work in a procurement capacity full time,” he said.

Loseby said he is looking for people with an “inquisitive nature”, strong soft skills and who are advocates of change “because that’s what we do in procurement to get a better result”. Arriva will also hire procurement professionals to complement them.

On presenting his strategy to the board, Loseby explained purchasers need to speak two languages. “There’s a lot of people talking what I call procurement speak and there’s a smaller number of people talking business speak,” he said. “Our job as procurement leaders is almost to translate procurement into a language which is recognised amongst the board.”

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