29 November 2013 | Ginny Warr
Housing associations are a social business, with strong roots in our communities and our current and future residents are at the heart of our business decisions.
Sovereign manages over 36,500 homes across the South West, providing a roof over the heads of around 80,000 people. As well as a landlord it is an experienced developer, building over 1,200 homes a year.
However, cuts to grant funding for new affordable homes, changes to the welfare system and an uncertain economy are making all housing associations become more commercial in achieving our social purpose.
When I joined two years ago as head of procurement, Sovereign had been through a rapid expansion, with four housing associations merging in one in October 2011.
Following this growth, we had a team of two looking after £132 million of spend across 3,600 suppliers. We didn’t have the right data at our fingertips or a plan aligned with the business. We also needed a new approach to working with our suppliers.
We started with the principle that we should succeed together. We launched our procurement strategy at our first supplier conference last autumn. The event was a new approach in itself and innovative in the sector at the time.
We invest a lot of money with our suppliers and it is right that we also invest time in them. The latest conference, held in Oxford this month, was another great success.
Our chief executive Ann Santry was there with the executive board and it was great to see delegates across the supply chain networking and finding better ways of working together.
It is a chance to share our social purpose as well as our commercial requirements and listen to what they need to work with us more effectively. This two-way dialogue is also part of our supplier performance programme. It is a consistent and transparent way to overcome challenges, putting in place improvement plans with actions for both parties.
We now have a full team of CIPS-qualified category managers and a supplier relationship manager, all working with the business to plan and manage their procurement needs. We also have an analyst to provide spend and supplier analytics for category managers to make informed sourcing and contracting decisions.
We are challenging and changing the old ways of just looking at outright purchase price. We are working with our suppliers and internal stakeholders to get a full understanding of the total lifecycle costs model before making any commitments to procure.
We have already halved our supplier base to 1,600 active suppliers. In fleet services alone we’ve moved from 33 suppliers to just five, saving us around £300,000.
We saved £3.8 million in 2011/12, with a further £4.2 million expected this year. Ultimately every penny we save makes a difference to our communities, whether it is helping to build a new home or providing support to an elderly or vulnerable resident.
You can find out more and download the presentations from the conference website.
☛ Ginny Warr is head of procurement at Sovereign