Making procurement central in the senior decision-making team helped the Co-op’s supply chain thrive through Covid-19.
Retailers are used to adapting, but rarely on the scale required at the peak of the coronavirus pandemic. Almost overnight, supply chains were fundamentally disrupted and customer behaviour changed dramatically. For procurement departments, it was a time to come into their own, ensuring not only that customers had the supplies they would need during a national lockdown but also that staff would be supported and safe.
For the Co-op – the 157-year-old, member-owned business that spans the UK’s sixth-largest supermarket chain as well as legal, financial and funeral firms – the challenge of the pandemic was profound. But the business had an ace up its sleeve, since procurement was so well-embedded and understood by senior leaders.
Leading from the top
The practical considerations of coronavirus began with personal protective equipment (PPE), says Claire Costello, chief procurement officer: “We had the immediate tactical needs of sourcing and securing the appropriate PPE for the safety of our colleagues across not just stores but also our funeral care teams, managing the impact and business continuity plans with and for our business stakeholders and with our own supply base, as well as navigating the fast-changing environment and government advice.”
At the same time, she adds, the procurement team – like others in the business – was transitioning to a world of remote working and dealing with the technology challenges this entailed, as well as staying close to suppliers who were facing similar situations.
Leadership has been crucial to overcoming these challenges, combined with teamwork and a culture of communication. “We already have strong leadership and protocols in our risk management, so this was something we were able to step up quickly, plus everyone who has worked in retail will know we adapt well to a crisis,” says Costello.
“We had a tight group of leaders working daily to discuss issues, actions and areas that needed additional support. Being a cross-functional team, it supported quicker sharing of information, questions and solutions.”
What ensured the Co-op’s coronavirus response was best-in-class was the centrality of procurement to the leadership team dealing with daily decision-making. Procurement took specific responsibility for managing and reporting on supply chain risk, the balance of due diligence and speed in the supply chain and the use of flexible payment terms. The function used intelligence from stores, such as any signs of panic buying, to carefully calibrate decisions.
It shows that when procurement is fully involved and given a remit to make decisions, the business always benefits.“It may sound like common sense, but it really is simply that transparency and openness gets things done quicker,” says Costello. “Being part of the incident management team – our cross-functional leadership team – meant we quickly understood business priorities and risks and could direct the team to support, flex and step in where needed. It was a critical part of driving quick decision-making that enabled successful sourcing and supplier management.
“Having strong and collaborative relationships with our key suppliers was a critical part of the success. Our suppliers are often already working with us on broader social value initiatives outside the core service. These relationships meant we were able to quickly co-operate on challenges and they were willing to often go above and beyond the core services to support in our hour of need.”
Ultimately, Covid-19 may prove the catalyst for driving efficiencies throughout the business, says Costello. “It has illustrated how we can support the needs of the business, how we can operate at pace and where it is appropriate take either a more tactical or strategic approach to sourcing.
“The pandemic has accelerated our plans on simplification. It has also accelerated our supplier management programme, ensuring we continue to build on those strong relationships and encourage participation and co-operation in delivering more broadly for our communities.”