16 January 2014 | Stephen Pugh
The working relationship between the procurement function and other departments is quite topical for us as it is just about a year ago that we centralised purchasing and appointed our first procurement manager.
Andrew Brookes, one of our management accountants, has taken the role.
He previously reported to me, but he now reports to our operations director, Karen Hester.
Andrew has kept some of his management accounting responsibility alongside his new procurement role. We moved a number of others, who were working in different areas of the business, to report to Andrew.
The board has taken quite a close interest in this change and Andrew has been along twice to board meetings this year to explain progress.
Set a savings target
Andrew has been set a savings target, but the board has been particularly interested in discussing how we make savings while ensuring that we work within the deeply engrained values that we at Adnams have developed as a family-owned company since we began brewing in 1872. We
do not want to compromise on quality, supplier behaviour or product appropriateness.
benefit both sides
It is important that we build professional long-term relationships with suppliers, that have benefit to both sides. We want to work with no more suppliers than necessary, build good relations, remain fair, and focus on long-tem value and not shorter-term price. Commitments need to be met.
We feel that the procurement function has done well in its first year. We are making purchasing plans earlier so that we have adequate time to agree decisions and negotiate; we are setting up systems so that we can more scientifically assess the relative merits of suppliers; and we are monitoring supplier behaviour with regard to matters such as ethics, provenance, price, value and customer focus.
to be struck
We are also monitoring ongoing purchasing arrangements to ensure that promises are kept and discounts earned are paid.
There is always a balance to be struck when centralising a function. On the one hand we want to focus skills, and on the other we need to stay close to business needs.
Some purchases are so specialist that business involvement is imperative, but we definitely feel that we have benefitted from centralisation.
However, as with any other part of a company organisation, we will keep looking to ensure that the procurement function is working as well as it possibly can.
☛ Stephen Pugh
joined Adnams, the Southwold-based family brewer, as finance director in October 2003