Growing demands on suppliers creates procurement opportunity

11 April 2018

The increasing business and regulatory demands on suppliers can create opportunities for procurement to take ownership of processes.

Gareth Mawdesley, head of procurement at insurance company NFU Mutual, said the growing requirements from the business on its supply chain has helped him broaden his relationship with stakeholders.

Speaking to SM, Mawdesley said requirements on suppliers have been increasing on several fronts, including financial regulations, information security and more recently data protection including GDPR. “The stakes have never been higher, the risks have never been higher and the focus on it is ever increasing,” he said.

“There’s a danger that each individual [business] function adds a little bit here and a little bit there. The cumulative effect in terms of what we were asking from vendor managers and suppliers was massive and they were starting to creak.

“The opportunity was to try and recognises that, to streamline it, and to be seen as part of the solution.”

Over the last few years, Mawdesley – who will be speaking at the ProcureCon Indirect conference in Copenhagen this month – has been working to expand procurement’s role from focusing on supplier selection to defining supply management policy and enabling stakeholders.

This involved creating processes and frameworks across a range of business functions, Mawdesley said, including IT, marketing, HR and professional services. These frameworks needed to be “sufficiently consistent but also flexible to cater for idiosyncrasies within particular categories”, he said.

Mawdesley also identified the need to work with a cross section of people. While procurement has ownership of frameworks, most of the execution is being done by colleagues across the business from very experienced vendor managers to an increasing number of colleagues new to supplier relationship management.

“The last thing I want to do is cramp people’s style and make it claustrophobic for them if they can do the job. On the other hand, we need to recognise when people need help,” he said.

Mawdesley took an iterative approach to policies and frameworks, and has created a governance role to facilitate continuous improvement of the process within his team. This role involves taking feedback, managing the framework and the policy and taking steps to improving it. “Trying to do it previously without specific resources allocated was proving too difficult,” he said.

Mawdesley has two other backstops – within the business functions of assurance and internal audit, which also monitor  policies.

“It just becomes a standard business process then. We own it, we need to improve it, we need to make sure people are trained and equipped and able to do it.”

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