The charity’s UK procurement department created efficiencies, made savings and improved best practice
Three years ago The Salvation Army (SA) faced a challenge – with over 1,000 social care centres across the UK and Northern Ireland, its localised procurement offering was not working efficiently. Commissioner Anthony Cotterill wanted a system that could consolidate these services and, in particular, centralise “big ticket items” to leverage benefits of scale. In October 2016, head of procurement Andy Roper was brought on board, his mission to bring the SA’s standalone UK sites under one roof, making savings for the organisation and enabling the staff to continue to focus on helping vulnerable people.
The UK arm of the international Christian charity runs services such as homeless centres, community centres and care homes, while also working to end human trafficking and modern slavery. It has an annual turnover of £300m, a spend of £160m, and now has 8,000 suppliers ranging from large corporations to SMEs, buying everything from servers and advertising to sleeping bags and magazine inserts for fundraising.
Roper’s team started by reviewing and mapping the supply chain for cost-saving opportunities and risk. By consolidating contracts and rationalising around 2,000 suppliers across telecoms, IT, fundraising and media buying, the team achieved a £7m savings by 2019 – exceeding the initial target of £4.7m. The team has had its biggest success cutting down agencies used, particularly for regulating services. “We can buy things effectively together and that’s how we make a lot of savings,” says Roper.
Roper introduced a procure to pay (P2P) system, enabling the various social care sites to make their own purchases while ensuring there was enough flexibility to allow the local management teams to keep “a sense of ownership and accountability for their own budget”. He says: “It’s about training and putting in the processes to deal with having such an incredibly large organisation. It’s giving budget holders the skills, but also giving them the authority and the trust to manage some areas of spend locally.”
Today, while the procurement team focuses on the high-value and high-risk purchases and creates frameworks for them, budget holders in centres across the UK are able to purchase specifically for their own location. Despite its size and range, the SA is a tight-knit community, and the team set up a communication and change management strategy to ensure budget holders understood the process through best practice training and regular contact.
As procurement knowledge in the charity sector is still growing and has “variable levels of procurement maturity and resource” it often relies on collaboration. SA makes many of its tools free and publicly available, including its supplier assessment questionnaire (see box, left), database structure, and procurement toolkit templates. Tools and practical guidance are shared with suppliers that lack resources to help improve the sector’s compliance, especially in high-risk areas such as cleaning agencies. Motivation for this goes beyond his own organisation, says Roper. “It’s about how we can actually affect change, which is why we’ve mapped this partly by risk but also by our ability to make a positive impact.”
Sharing tools to benefit the sector
The charity has been at the forefront of improving sustainability and compliance in the supply chain.
In 2019 the Salvation Army procurement team developed a tool for suppliers to self-assess through an in-depth, specialised questionnaire set up on an electronic pre-qualification system. This identifies areas of risk that suppliers may fall short on and could improve.
Risk areas addressed include forced labour, modern slavery, trafficking and environmental areas. The questionnaire is publicly available as an open source tool for other charities and organisations.
Roper says: “Some of these [suppliers] are big corporations and they know all about this, but some of them are SMEs and they don’t have the time to send people away to a retraining or awareness course.”