We asked Richard Stewart, Group Head of Procurement for FTSE100 company Smiths Group to share his experience of the changes needed to leverage group purchasing expertise across a decentralised global technology company with five divisions John Crane, Smiths Medical, Smiths Detection, Smiths Interconnect and Flex-Tek operating across the world.
“When I joined Smiths in 2013, my remit was to work with the five divisions to improve procurement across the group. We believed that there was good scope to create greater financial returns from procurement but also to help us manage risk and improve levels of expertise.
Smiths is a highly decentralised global technology company with five different divisions operating in different markets. So the biggest issue initially was creating connections across the individual teams to work together as a function.
A key enabler for this was the leadership team which works together to set direction for procurement across the entire organisation. An early step was to bring this team together to develop a roadmap for the next 2-3 years. As part of this, we invested in key software tools, market intelligence, and spend analysis. For instance, we closely watch volatile commodity prices. Not to mention cost modelling, driving take-up of e-auctions and, in particular, standardised scorecards for all procurement.
A core part of our programme was category management training that involved 90%
of colleagues (around 100 people). This has helped helped us foster a procurement community with a common
language, which has been vital.
Overall, we are aiming to create a framework for procurement, and a shared understanding of
Of course, it’s all
a learning experience too – it is important to push forward new ideas but you also need to adjust the speed of proposed change
to the pace of the organisation and this requires patience.
Reflecting on the first two years, I’m pleased with the progress we are making and we have had great support from senior leadership. We’re now aspiring to build links between procurement and revenue growth for the next phase of our development – that’s our ambition anyway.”
Working with Richard we have seen how he has tried to strike the balance between maintaining divisional procurement autonomy, expertise and passion, and leveraging group purchasing power and expertise widely across the different divisions of Smiths, with different cultures and business models.
Using a suite of procurement enablement tools and by implementing a category management toolkit and training he is creating a common language and a set of shared experiences which will maintain the existing strengths but will drive consistency and the ability to collaborate to leverage power and expertise across common categories...This way of building momentum for change and a group approach appears to sit well with Smiths group corporate culture and strategic objectives.
Do you have experience of creating group procurement expertise in a de-centralised business? What works and what doesn’t work? Let us know in the comments below.
If you would like to appear in our Change Makers series then contact Anna Del Mar for details here.
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