E-commerce and delivery management firm Whistl turned away from a category management structure in procurement to a project-based approach.
Gareth Hughes, procurement and property director at Whistl, said category management was not right for the company because more flexibility was needed in the team.
Speaking to SM he said a procurement transformation began three years ago, following a management buy-out of the UK arm of Dutch mail delivery firm Post NL, involving a “major restructuring of the department from category-led procurement to a programme-led structure”.
He said: “The category manager model doesn't work for us as a business. Previously, we've been organised on a kind of category management basis. We had to almost spin that on its head and say, 'The business doesn't really need category management, it needs delivery where it matters’.”
Hughes said that the company knew it would need to do more around “acquisition due diligence, integrating businesses, network changes and expansion such as buying and switching out properties” and the department needed to have the capabilities to focus and deliver in different areas.
“It was a massive change and we had to almost turn off the category management and base it on a programme of prioritised projects that the business needed,” he said.
The projects managed by procurement were varied and might range from “finding new sites to expand into and securing those sites, new IT platforms, or changing the shape of the fleet, or integrating some of those businesses that Whistl acquired”.
The change from category-led to programme-led procurement meant reassessing the team and recruiting those with broader skills including “commercial skills, stakeholder management skills, and project management skills”.
Hughes said: “I couldn't have category managers who had expertise in their own category, but weren't able to turn their hands to multiple projects. From a resource point of view, we needed people who were more agile and flexible but had good, strong procurement and commercial skills.
“We found that there was a bit of a challenge in securing procurement people with a broad range of category experience or an experience of doing procurement in different ways.”
The new structure of the company has also resulted in many benefits to daily operations, decision-making and communication between procurement and other areas in the business, said Hughes.
He said: “We have a seat on the board, which makes a difference because we are now fully aligned and engaged with the other functions in the business and we have full sponsorship from the CEO.”
Whistl set up a new roadmap for procurement and supply management called ROI, which stands for “risk, opportunities and innovation – that's at the core of everything”.
Processes have been simplified and tailored towards project management, with extensive “100-page procurement manuals” replaced with one-page guides.
Supplier meetings have a structured agenda which includes risk points, opportunities, and innovation. A document-sharing platform is used so information on suppliers is visible across the department.
Hughes said: “We were finding that suppliers were bringing opportunities to the table but we weren't capitalising on them because people were too busy or they weren't sure how to do it.
“We want suppliers to come to the table with ideas, that doesn't have to be fancy technology, but it could be new product development, or it could be dealing with inefficiencies that they see and how we can work differently.”
The Whistl management team bought the UK branch of PostNL, a Dutch mail delivery firm, in 2015. The UK branch of PostNL, TNT Post, had been rebranded to Whistl in 2014.
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