Sainsbury's transformation delivered £90m savings

7 February 2020

The procurement team at Sainsbury’s led a transformation programme that brought £90m in savings and created a “cost-conscious culture”.

Speaking at the CIPS Best in Procurement event in London, the team explained how it delivered a transformational change programme that resulted in 349 projects, £90m in savings, and significant cultural change. 

Orla Walshe, category manager of marketing, loyalty and data, said the procurement team was restructured and tasked to “lead for commercial change and drive value at pace by challenging suppliers, stakeholders and ourselves to embrace a cost conscious culture”.

The team headed up projects across several categories, including in-store, digital and technology, marketing, logistics and fleet, facilities management, and energy and utilities. 

Examples included introducing a smart shop app, creating a wireless area network strategy that laid the foundation for the first group-wide media deal, consolidation of facilities, and a £66m LED lighting deal.

This also included work with Argos that delivered a £160m synergy target nine months ahead of schedule. 

Walshe said: “We introduced a strategy team and that looked after our processes and policies. And what they did was simplify our ways of working so that we could take the admin burden away from our buyers and get them focused on driving value initiatives.” 

She added: “The other thing that we did as part of that change was to upweight our management level.”

Jack Whitehead, buyer of travel and professional services, said: “We started off by getting a board level mandate to engage procurement in the commercial process and make sure we had a seat at the table.”

He added: “The fantastic sourcing initiatives from our teams wouldn't have been possible unless they were underpinned by best practice.”

Sam Woodhouse, category manager of facilities management, security and retail, described a consolidation to bring 19 buildings under 13 suppliers down to one strategic supplier. He said: “We introduced great space management technology, IoT [internet of things] building test sensor technology and some really great energy management principles, and that allowed us – on the energy side – to drive consumption tools like survival minimum and strategic optimum.”  

These tools helped change attitudes in the company to enable change, he added.

Procurement “changed mindsets by championing the cost agenda” through working with Sainsbury’s “ministries”, which represent different areas including culture, charity and social, recruitment and the external brand, and training.

The team led the change, rather than simply carrying out “a directive from the top”. Liban Aingal, buyer of software, digital and technology, said: “The best thing about this was it was entirely colleague-led and the content was delivered in a peer-to-peer delivery mode.” 

Cross functional workshops were used to support the change programme by assessing where the problems were and finding ways to create leaner processes. 

Benefits from the transformation included electronic signatures, spend insights, simplified terms and conditions, automated savings and the use of a centralised supplier watch list.

In the CIPS SM Awards 2019 Sainsbury’s won Procurement Team of the Year, large team, and Patrick Dunne, director of property, procurement and cost transformation, won Leader of the Year.

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