Supply Management Winners' brochure 2014 by Redactive Media Group

11 September 2014 Grosvenor House Hotel, Park Lane, London Celebrating excellence in procurement and supply management

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www.airplus.com

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AirPlus in a nutshell. AirPlus is a leading specialist in corporate payment and management information providing customers with better data which aids reconciliation, travel compliance and supplier negotiations. With 25 years experience we offer products to over 40,000 customers on a global basis including corporate cards, centrally billed accounts, virtual card solutions, mobile payment applications and expert reporting tools. Being dedicated in this area means that we can ensure that our innovative products and customer services are second to none and that our ďŹ&#x201A;exible solutions ďŹ t seamlessly to our customersâ&#x20AC;&#x2122; needs.

Well-being: Increased importance on healthy, productive travellers may lead to monitoring stress levels and reviewing policy to ensure it’s traveller friendly.

Quick quiz: What will be the top cost saving priority over the coming year? a) Optimising air spend b) Streamlining hotel costs c) Tightening travel policy Answer: c

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Technology will become business travellers’ best friend, with widespread WiFi connectivity and a wealth of travel apps making trips smoother and more productive.

Who thinks balancing cost managment and traveller well-being is a challenge?

56% United Kingdom

63%

65% Western Europe

Global Average Source: AirPlus International Travel Management Study 2014

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Contents 6 Overview, The CIPS Innovation Award in Memory of Karen Van Vuuren, the judging panel 8 Overall Winner and Best Supplier Relationship Management 10 Best Contribution to the Reputation of the Procurement Profession 11 Best Public Procurement Project 13 Best Cross Functional Teamwork 14 Most Improved Procurement Operation – Start Up

Chartered Institute of Purchasing & Supply Easton House, Easton on the Hill, Stamford, Lincolnshire PE9 3NZ Tel 01780 756777 Email info@cips.org

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15 Most Improved Procurement Operation – Step Change 17 Best People Development Initiative 18 Best Contribution to Corporate Responsibility 19 International Procurement Project of the Year 20 Best Third Sector/Not-for-profit Procurement Project 21 Most Innovative Use of Technology 23 Best Procurement Consultancy Project of the Year 24 CIPS Procurement and Supply Chain Management Professional of the Year

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25 CIPS Young Procurement and Supply Chain Management Professional of the Year 26 Past Winners

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Organised by

www.cipssmawards.com

Stephen Mangan is an acclaimed actor who has appeared in some of the UK’s best TV comedy of recent years, including Episodes, with Matt LeBlanc. Stephen is best known for his role as the delusional and arrogant anaesthetist Guy Secretan in the hit Channel 4 hospital sitcom Green Wing.

“Stephen’s natural ability with a range of comic characterisations has seen him appear in shows including I’m Alan Partridge, Free Agents, Dirk Gently, Adrian Mole: The Cappuccino Years, and The Armando Iannucci Shows”

Overview Reaching the highest standard I have to admit this night is one of my favourites in the CIPS events calendar. The CIPS Supply Management Awards are now in their 12th year and it’s no surprise that they have become the most talked about event of the procurement year. What’s really exciting for me is that since joining CIPS in 2009 I have seen the excellence and integrity of these awards develop across the globe. We now have similar award ceremonies in MENA, Africa and Australasia and from 2015 we will be introducing a global winner’s category in which the overall winners from each region will compete for the ultimate crown. I know how much hard work and dedication the CIPS and Supply Management teams put in to making these awards happen.

for helping us achieve another year of excellence. I always find it quite humbling on the night to look out at a room of over 1,000 individuals representing our amazing and ever-changing profession. Listening to the achievements of the shortlisted entries is proof of the true value this profession brings to the world at large. The entries come from all types of organisations and each entry is judged on its independent merits. The common thread across all entries is a passion and determination to succeed and deliver. CIPS prides itself on setting standards of excellence in education as well as across procurement delivery; helping 1,000s of individuals across the world achieve their aims and objectives, whether it’s personally or with their organisation. But here in this one room tonight is another standard of excellence, it’s about the real face of procurement in action, so don’t forget to take a moment to look round the room at your colleagues and take pride in this great profession. Enjoy your evening.

We also have an illustrious team of independent judges who put days and days of work and debate into ensuring the most deserving entries are shortlisted and the winners are diligently picked to claim their accolades. The judging is the crux of the whole process and no judge undertakes the task lightly, so from me a huge thank you to all of you

David Noble, Group CEO, CIPS

The CIPS Innovation Award in Memory of Karen Van Vuuren Karen Van Vuuren joined CIPS at the end of 2004, and was awarded Fellowship 14 months later. Appointed to the Global Board of Trustees in 2010 as Deputy Chairman, she became Chairman in November 2011 and joined the Nominations Committee in 2014. Passionate about professional development, as Chairman of the Board of the Institute of Purchasing and Supply South Africa, she was key in crafting the relationship with CIPS. The organisations merged in 2010 and she became an Executive Board Director of CIPS Southern Africa. Previously CPO at Absa, she most recently headed group procurement at Anglo Gold Ashanti. Karen passed away in February 2014 and this Award has been launched in her honour. Marks & Spencer, also winner of this year’s Best People Development Award, received the Innovation Award for its iLEARN Talent Development Programme, which by developing staff and educating stakeholders, has enabled the function to play the role of ‘corporate coach’. The training has also been provided to charity Save the Children, demonstrating its commitment to promoting good practice throughout the profession.

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Chair

The Judges Andrew Newnham

Alyson Brett

Jim Carter

Chair of Judges and Group Procurement Director, ITV

CEO, NHS Commercial Solutions

Head of Contracts and Procurement Operations, Network Rail

Al Collier

Pia Larsen

Sue Moffatt

Head of Procurement, Norfolk County Council

Director of Procurement and Supply Chain, UCLH NHS Foundation Trust

Director, National Procurement Service for Wales

Nicki Perrott

Clive Rees

Emma Scott

Head of Procurement, Sainsbury’s

Chief Procurement Officer, Fujitsu

Representation Manager, CIPS

Paul Snell

Andrew Swift

Acting Managing Editor, Supply Management

Head of Global Procurement, Affinion International

Gerry Tominey

Liz Townsend

Chief Procurement Officer, Associated British Foods

Head of Procurement, Gatwick Airport

For the 13 members of this year’s judging panel, picking the winners has been a challenging, time-consuming process. The entries had to be read and rated over a three-month period. As well as two full-day meetings in London, each judge spent days deciding which organisations to shortlist and choosing the final winners. Their commitment and professionalism have been greatly appreciated.

Since 2009, the CIPS SM Awards judges have used QinetiQ Commerce Decisions AWARD™ evaluation software for the assessment of submissions. The process is entirely electronic, making it as efficient for the judges and as equitable for the candidate organisations as possible. Our thanks to QinetiQ Commerce Decisions for its support.

OFFICIAL TECHNOLOGY SUPPLIER

CIPS SM Awards 2014 07

Overall Winner Overall Winner & Best Supplier Relationship Management

Selex ES & REO

In 2009 Selex was awarded a contract with a major US government contractor to develop a prototype for a major laser programme for the US armed forces. The company needed suppliers with a strong focus on quality. Selex awarded the contract for high-precision optical assemblies to Research Electro-Optics (REO), based in Colorado in the US, with no other supplier available to supply to the required standard. The company delivered the prototypes, and in 2012 Selex was awarded a further deal to produce more than 200 lasers, starting at two per month rising to 22, over what was described as an “aggressive timescale”.

It can be hard to ask for help, especially when a contract is involved. But the experience of this year’s CIPS SM Awards overall winner illustrates that asking for support doesn’t have to have negative consequences – quite the reverse in fact. 08 CIPS SM Awards 2014

However, it quickly became apparent there were problems with the design of the more complex assembly, and REO was not able to produce to the required standard, with problems including the optical assembly being manufactured incorrectly, contamination and unready production processes.

REO only sent Selex good product, and a shortfall occurred, straining the relationship and lowering confidence in the supplier. The president of REO realised the issues and asked for support, offering an “open door”. Following an assessment of the problem, an agreement about what was needed, and an audit of REO’s premises and full stakeholder analysis, the Selex procurement team called a meeting and support was agreed. This included training for REO staff to pass on Selex’s expertise, implementation of a ‘five S’ policy and lean manufacturing approach, and support through the aerospace sector’s SC21 supplier development programme. A sub-contract manager was also seconded to REO to oversee the objectives for 16 weeks, along with a number of other staff who provided specific expertise for shorter periods. A 146-point action plan was developed as well to overhaul the relationship, and Selex secured support from its customer to provide further support for REO, including a visit to their own optics production facility. KPIs were also developed to measure progress including capital investment in their production capability, improved documentation, fewer products being returned to the vendor, and cost reduction.

supplied to Selex. Selex managed to exceed its delivery target by the end of the first year, resulting in a follow-on order from the customer worth $70 million. REO was also presented as an example of best practice at the Selex Laser Supplier Conference in March 2014, with Selex explaining to other suppliers that asking for help can be rewarded while also enhancing its image as a customer. “A successful business relationship is one that is based on openness and trust,” said Audrey Black, VP advanced targeting division at Selex. “REO have completely embraced this ethos and have worked closely with Selex and completely turned round all aspects of their business performance. This exercise has been a great success and will be used as a benchmark for future similar programmes.”

Judges’ Comments “The winner showed an impressive approach to supplier management, working hand in hand with the business to deliver real and tangible benefits, owning a problem and working hard to turn a failing supplier around. They showed tenacity and openness when working with the supplier that resulted in a real step change in performance.”

This level of support had never been committed to an overseas supplier before. The turnaround has been dramatic. The action plan was completed within six months. The defect rate was reduced to less than 3 per cent of its peak value. There was a 10 per cent reduction of the price of the complex assembly, and using the lessons learnt on this project on other products enabled an average reduction of 17 per cent in other parts

Also on the Shortlist BAE Systems - Military Air & Information and partners EDF Energy Nuclear Generation and Doosan Babcock Jaguar Land Rover and Alps Electric Europe Severn Trent Water and partners Surrey County Council and partners

CIPS SM Awards 2014 09

Winner Best Contribution to the Reputation of the Procurement Profession

Department for International Development (DFID)

A ground-breaking project that will save millions of lives through the procurement of malaria-preventing mosquito nets has won Best Contribution to the Reputation of the Procurement Profession. A consortium including the Department for International Development (DFID) and the Global Fund to Fight Aids, TB and Malaria (GFATM) carried out the world’s largest tender for the supply of nets, producing an estimated saving of more than $140 million. The project will provide 190 million bed nets and protect almost 400 million people at risk of malaria in 30 countries across Africa and Asia – saving the lives of an estimated 1.3 million children. Last year DFID and GFATM carried out a review to explore constraints to efficient operations, promote the commercial expertise of field staff and achieve greater transparency on costs and payment options. This coincided with GFATM moving towards becoming a sourcing organisation, and a new purchasing framework was established, shifting the “locus of control” to buyers. There are now seven net suppliers, with a strong focus on local production. Previously 50 to 80 per cent of nets were bought from two suppliers. Long-term contracts improve visibility, capacity planning and pricing, while supporting domestic production in countries with a demand for nets. The

10 CIPS SM Awards 2014

Judges’ Comments “The winner of this category clearly demonstrates just how far-reaching the impact of procurement can be, delivering a wide range of benefits from sustainability, economic development and, of course, value.” aim of the tender was to generate overall value by ordering more nets and simplifying procurement. Multiple international donors, procurers and implementing organisations created partnerships to enable the tender to go ahead and the pricing is available to developing countries, which have traditionally paid a premium of up to 27 per cent. Further work will improve production, reduce waste, develop local manufacturing, integrate logistics and engage with governments to explore tax breaks. Other partners included the US President’s Malaria Initiative, UNICEF, the Clinton Health Access Initiative, Roll Back Malaria Partnership and Raymond Chambers, the UN secretary-general’s special envoy for malaria.

Also on the Shortlist NHS Walsall Clinical Commissioning Group The Shell Petroleum Development Company of Nigeria Limited

Winner

Best Public Procurement Project

YPO, ESPO and NEPO (on behalf of Pro5) and Crown Commercial Service

Insurance can be an extremely complex area for procurement. However, an effective collaboration between public buying organisations (PBOs) YPO, ESPO and NEPO (on behalf of Pro5) and the Crown Commercial Service (CCS) has already led to £3.2 million of savings.

according to the PBOs and CCS. The group found public sector procedures were seen as overly bureaucratic so they ensured procurement was run along “lean sourcing principles”, which included an understanding of business outcomes, pre-market engagement, detailed planning and e-sourcing tools.

It helped Blackpool City Council save £801,000 and Hertfordshire County Council’s insurance manager Pauline Tinnelly says it helped the authority shorten timescales by six weeks, and save £500,000, compared with the previous year. The insurance services initiative expects to save the public sector

They produced a customer guide; developed a commercial agreement defining the project and engaged with international government departments to share best practice. This highlighted a knowledge gap and market intelligence days were organised.

Judges’ Comments “The team demonstrated a creative approach to a category procurement can find difficulty gaining traction in. There is evidence of not only real cash savings but a team that engaged widely with stakeholders and the wider market to deliver outstanding results.” £40 million between 2013 and 2022, providing customers enter a long-term agreement for five years during the fourth year of the deal. Historically, the public sector approach to insurance procurement was “fragmented”, with estimated spend in excess of £1 billion. The agreement shares resources and moves away from having two competing agreements in the marketplace,

Delivered at 30 per cent under budget and nine days ahead of the 85 days target, the procurement phase saw a 500 per cent increase on regional bids as 29 insurers were successful and more than 130 customers have used it, saving time and resources. In terms of service improvements, 10 insurers increased their classes of insurance offered by 5 per cent, and two brokers reduced their daily rate by at least 30 per cent.

Also on the Shortlist Bedford Borough Council BSO Procurement and Logistics Service Crown Commercial Service HM Revenue and Customs Medway Council Surrey County Council

CIPS SM Awards 2014 11

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Winner Best Cross Functional Teamwork

Premier Foods Plc

Would anyone imagine pre-packaged mince pie shipping units causing food manufacturers a big headache? Well, while popular with supermarkets – arriving pre-packed in the display unit and being easy to move – it is always very difficult to forecast, pack, test, deliver, trace and measure their profitability. Premier Foods’ procurement team challenged itself to increase the units profitability, improve customer satisfaction, reduce waste and its carbon footprint, simplify the process, gain better visibility of the process and lower the total cost of the unit. By filming the complex process of putting together the mince pie shippers, the team highlighted the issue to senior management. “[The film] created interest on a topic that was previously uncared for and provided a catalyst to drive change,” its entry says. The team expanded its scope to see whether the shipper designs could be simplified, learning that the long distances between the suppliers and factory locations impacted on the total shipper costs. A further tender focused on who would pack the stock into the units. The team said this helped it gain better visibility and control over the total cost and also measure the unit’s carbon footprint. They worked closely with the packaging procurement and procurement co-manufacturing teams, which boosted industry knowledge during the tender. After the contracts were awarded, an interdepartmental supplier execution team was set up to manage the “ever-changing demands of our customers”.

Judges’ Comments “This organisation showed great innovation. For example filming inefficient cross-functional processes to see how they could be improved.” A new shipper governance process was also established, helping the team achieve full transparency. The project helped Premier Foods increase its co-pack capacity from 400 to 1,000 units per day; reduce its supply of contingent stock by 66 per cent; build the units faster and inside the factory; reduce the distance travelled by 83 per cent; and halve its carbon footprint. It saved an average of 22 per cent on each shipper and saw a 30 per cent increase in Christmas orders last year, and a 68 per cent rise over Easter.

Also on the Shortlist BAE Systems - Military Air & Information Britvic Soft Drinks – Business stability Britvic Soft Drinks – Pop art Citi Clydesdale Bank Jaguar Land Rover National Grid NHS Health and Social Care Information Centre Scottish Prison Service University Hospital of North Staffordshire

CIPS SM Awards 2014 13

Winner Most Improved Procurement Operation - Start Up

Henderson Global Investors

In April 2012, one of Europe’s largest investment managers, Henderson Global Investors established its first ‘greenfield’ centralised procurement function. It made significant savings within three months, focusing initially on travel and office supplies among other areas. The speed was crucial as it had to win credibility with stakeholders. Its establishment followed the FTSE 250 firm’s annual third party spend rising significantly after it acquired New Star Asset Management in 2009, and Gartmore Group in 2011. A procurement approach was agreed with a three year plan focusing on key deliverables: delivering multi-million pound savings; embedding the process and implementing systems to improve control. A second phase included launching the group procurement policy, formalising the supplier due diligence process and introducing sign-off by the head of procurement. As a team of three, procurement has had to be dynamic in supporting c.1,000 global staff. It focuses on strategic projects while providing guidance for smaller purchasing activities through skills courses. Its own team members are sponsored towards CIPS qualifications and attend investment management training to understand the core business. And it’s successful – all 29 projects it supported in 2013 originated from internal requests and in a stakeholder survey in July 2013, 72 per cent of respondents rated its help as critical in meeting business goals.

14 CIPS SM Awards 2014

Judges’ Comments “In a very challenging industry this entry was a clear winner demonstrating a well planned and executed implementation of procurement processes, controls and systems. The submission also highlighted ways in which procurement engaged with stakeholders in innovative and creative ways such as the introduction of training courses. As a start up function they have also delivered commendable savings.” Strategic projects – including streamlining two transfer agents – offered scope and Henderson’s decision to put its audit out to tender and move to an integrated model challenged the newly-created function. Currently it’s promoting engagement with the company’s international offices and a purchase-to-pay scheme, which will introduce automation, improve controls and support a more proactive management approach. Hailing “winning over colleagues” as their “most pleasing achievement” the team is getting behind the board’s aspirations for further growth.

Also on the Shortlist Cestria Community Housing Medway Council Travelex

Winner Most Improved Procurement Operation - Step Change

Lloyds Banking Group

The public perception of the financial services sector hit rock bottom after the 2008 banking crisis. And with £20 billion of public money having to be pumped into Lloyds Banking Group after Lloyds TSB’s takeover of HBOS it needed to change its fortunes quickly. One way was to move procurement to a pivotal role. Lloyds developed a three-year ‘Simplification Sourcing’ programme in 2011 to create £560 million bottom line savings over three years, reduce the number of suppliers and improve the function’s capability. It aimed to reshape the third party cost base and deliver a process that managed category strategies, sourcing, contract and supplier management, risk and compliance and people development. Sourcing activity ensured competitive advantage, risk management and responsible business practices. Contracts were delivered with the support of the legal team and control was provided on all aspects of procurement.

Judges’ Comments “Lloyds’ entry stood out because it demonstrated a three-year strategy and vision. They conducted a benchmarking exercise to compare themselves with peer organisations which formed a baseline from which to identify areas of improvement and re-measure three years’ later to provide an objective indicator of progression, CEO endorsement of their efforts and contribution assisted in providing senior stakeholder support.”

The implementation of Cost Management Units to all major spend areas meant all spend requests were presented to the function and the cost base of Lloyds Banking Group dropped from £10.8 billion to £9.1 billion between 2011 and 2014. With Group Sourcing managing 97 per cent of group spend, the cost base of the bank reduced by 16 per cent in three years, and the programme delivered the greatest rate of return (23 times) within the bank. Recently the spend concentration with the top 100 suppliers was 82 per cent, and LBG is returning to private ownership – from 43 per cent to 25 per cent, as of April 2014. The result is that procurement is now seen as a true business partner, as evidenced by the CPO sitting on the Group Operations Board as a senior member.

Also on the Shortlist ABB Citi EDF Energy - Coal and Gas Operations InterContinental Hotels Group London Borough of Hounslow Post Office QinetiQ Severn Trent Water Swinton Group Vaultex UK YPO

CIPS SM Awards 2014 15

A new procurement future Standards, ethics, innovation

CIPS Annual Conference and Exhibition 2014 Taking place at a pivotal time in procurement and supply management attend the CIPS Annual Conference and Exhibition in London on 2 October and explore the latest professional trends in standards, ethics and innovation.

• NETWORK with over 300 peers and procurement professionals • LEARN from industry pioneers, who will discuss topics important to the profession • CHOOSE from a number of expert-led workshops, each offering practical advice

The conference programme provides you with the opportunity to learn from industry pioneers and thought-leaders through a series of plenary sessions and break-out workshops.

• CONNECT with industry suppliers at the exhibition • EARN up to 7 CPD hours

Speakers include: John Glen CIPS Economist, Media Commentator and Senior Lecturer, Cranfield University Jay Rayner Award-winning Writer, Journalist and Broadcaster and Expert Commentator on food supply chains Babs Omotowa Managing Director and Chief Executive Officer, Nigeria LNG Limited

Workshop sponsors:

Drinks reception sponsor:

Exhibitors:

2 October 2014 etc.venues 155 Bishopsgate, London www.cipsannualconference.com

Booking Enquiries T: +44 (0)20 7880 7555 E: info@cipsannualconference.com

Winner Best People Development Initiative

Marks & Spencer

In 2010 a thorough training needs assessment of Marks & Spencer’s procurement department identified a gap in four core areas: negotiation, presenting, stakeholder management and influencing. A comprehensive six-month group training programme, in conjunction with external training consultancies, enhanced the team’s skills by identifying needs and leading on its own training programme. Indeed, its iLEARN Talent Development Programme has been so successful – empowering procurement to train others in transferable negotiation, influencing and stakeholder management – it’s carved the team out a role as ‘corporate coach’. The three half-day training workshops designed by procurement for other professionals, ‘iDEAL’, ‘Stakeholder Management’ and ‘Under the Influence’ have elevated the procurement profile within M&S. A sub-team created content for iLEARN’s 11 modules. This includes facilitating twohour interactive workshops delivered “by the team, for the team”. It also wrote iSHOP, a guide to the six habits of procurement to provide advice, tools and techniques for staff when purchasing low-value nonmerchandise goods and services.

Judges’ Comments “A fantastically creative programme that focused on both the individual and the organisation. Showed real thought leadership in people development.”

The programme – bolstered by an intranet portal including course material, notes and a self-learning toolkit – supports new starters, and procurement also trains and inducts new recruits. The iDEAL course has become the standard negotiation course for the business, training more than 500 employees within the UK and 120 employees from its international offices. Feedback has been exceptional, with a 100 per cent rating of either ‘good’ or ‘excellent’. The team has even taken this training outside M&S, working with Save the Children, among other organisations. Overall, iLEARN has generated more than £500,000 savings on external negotiation training since its launch. The workforce is highly motivated, with job satisfaction scores increasing each year and a 100 per cent satisfaction rating for people development. The procurement team has doubled the benefits it delivers to M&S from £20 million to £40 million a year, and delivers 30 times every salary within the team.

Also on the Shortlist Crown Commercial Service IBM Integrated Supply Chain Jaguar Land Rover Mondelēz International National Grid Welsh Government

CIPS SM Awards 2014 17

Winner Best Contribution to Corporate Responsibility

BT clinched Best Contribution to Corporate Responsibility with its innovative Better Future Supplier Forum (BFSF) that resulted in carbon savings of more than 25,000 tonnes in 2013. The company aims to help customers reduce their carbon impact by three times the carbon impact of BT’s business. Because the supply chain is responsible for 64 per cent of its end to end carbon impact, it was critical for BT to engage with suppliers through an innovative development model. The BFSF delivers by engaging suppliers and encouraging them to join up, benchmarking them against global best practice. BT then works closely with them to improve sustainability and to help with product innovation. Achieving a satisfactory CSR performance is a prerequisite for progressing within the BFSG, and this ensures BT deals with ethical organisations that manage their supply chains in line with International Labour Organization guidelines. The process culminates in an annual challenge where suppliers are invited to pitch sustainability ideas to BT, which are evaluated for commercial feasibility and are awarded gold, silver or bronze for their performance.

Judges’ Comments “This entry stood out as contributing not only the CSR targets of the entrant, but also their customers’ and suppliers’. A compelling entry, well executed and demonstrating leading best practice, ambitious in terms of its objectives and results.”

18 CIPS SM Awards 2014

The BFSF has been piloted over the past few years but in 2013 BT deployed an improved model with nine key suppliers, with the aim of “industrialising” the process to cover the entire BT supplier base from 2014 onwards. Part of this process has been the creation of a carbon bank, which captures supplier carbon savings in a consistent way. In 2013 participating suppliers delivered carbon savings of 25,765 tonnes. There were also 15 per cent reductions in solid waste, a 5 per cent drop in total energy consumption and a 7 per cent drop in total water use. The carbon footprint of one of BT’s core retail products was cut by 30 per cent and its costs by 20 per cent. The project has seen accident and sickness rates drop at suppliers while quality improved and NGOs report improvements in the living conditions of workers at suppliers engaged in the BFSF. According to BT one of the BFSF’s most exciting aspects has been the transformation of internal capacity in participating suppliers where people have become expert in CSR/sustainability practices.

Also on the Shortlist Capgemini UK Efficiency North F. Hoffman-La Roche Marks & Spencer Scottish Government Procurement Team Surrey County Council

Winner International Procurement Project of the Year

BAE Systems – Military Air & Information

Within the space of four years BAE Systems, a principal sub contractor in the F-35 Lightning II programme, the world’s largest single defence project under prime contractor Lockheed Martin in the US, transferred technology and know-how to Australian tooling firm Marand to enable them to produce vertical tails for the F-35 fighter. The F-35 programme involves the US and eight partner nations, with a key aim being to ensure sales in partner countries by sharing work. BAE Systems is responsible for design and manufacture of the aft fuselage and horizontal and vertical tails, as well as fuel and mission systems. It was challenged with finding a supplier in Australia for the aircraft’s vertical tail but was unable to do so. Instead, it worked with Marand, a tooling house with no aeronautical structures experience, to give the firm the capability to produce 722 tails. The F-35 Joint Programme Office expressed doubts over Marand’s ability to produce parts equivalent to those of BAE, and concerns were also raised about the costs of bridging the capability gap. To address these BAE wanted Marand to be an extension of its UK facility. There had to be no operating difference between the two build lines. This required a customer-supplier relationship of complete transparency and trust. Both firms worked to develop this from day one, with BAE establishing training modules covering project management, supply

Judges’ Comments “This entry showed how to successfully deliver a highly complex project across international boundaries. It showed real innovation and best practice by working hand in hand with an international supplier to meet key strategic objectives.” chain management, manufacturing engineering, materials and processes and quality and operators. This process included co-locating BAE supplier management and engineering support in Australia and hands-on training for Marand staff in the UK. The project has saved millions of pounds, with the key drivers being affordability and cost reduction, and it won a BAE Systems Military Air & Information award for best supplier relationship activity. In fact the partnership has been so successful that the approach will be transferred to other suppliers in Canada, Australia and Denmark, and may even be deployed further, within the F-35 programme and beyond.

Also on the Shortlist Department for International Development Jaguar Land Rover Johnson Controls Global WorkPlace Solutions Nissan

CIPS SM Awards 2014 19

Winner Best Third Sector/Not-for-profit Procurement Project

Canal & River Trust

Two thousand miles of historic inland waterways stretch across England and Wales. Often more than 200 years old, these canals are linked by an enormous network of bridges, embankments, towpaths, aqueducts, docks and reservoirs. For the charity responsible for maintaining them – the Canal & River Trust – ensuring the waterways offer an “authentic, unfenced opportunity to interact with history, wildlife and nature first hand,” is vital. And spending about £8 million every year on managing vegetation, cleaning customer facilities and clearing litter plays a fundamental role in this. Up until 2009, this spend was inconsistent, and not always compliant with environmental, heritage and safety standards, because about 100 different contractors carried them out. A procurement-led pilot that year saw the team bring the services under one national contact, saving £1.5 million. However, it is last year’s re-tendering process that resulted in savings of 16 per cent on top of the £1.5 million across core and ad hoc works, while delivering a consistently high level of service. Dealing with one contractor and one invoice each month resulted in savings on supervision and administration in regional business units and the shared service centre. The project resulted in improved safety, environmental and customer service standards, while the use of handheld devices by the supplier’s staff enabled them to record their work, which is downloaded to a

20 CIPS SM Awards 2014

Judges’ Comments “This project had very clearly been subject to the application of rigorous procurement process, which delivered intended outcomes.” central database and allows the Trust’s business units to monitor and measure their activity. A steering group of cross-functional senior managers and a project team of cross-functional representatives reviewed the 2009 contract. They made changes to the specifications, standard and contractual mechanisms. A national five-year fixed contract in the single national framework model with a bespoke pre-qualification and selection process was introduced, aiming to attract a wide competition base and encourage innovation. Importantly the contract was written in plain English and was legally and methodologically robust, while remaining flexible in the type of service, procurement, pricing, payment and allocation of risk offered. “The Term Service Contract promotes a partnering, collaborative approach which has a consistent record of delivering facilities management and maintenance services with improved efficiency,” the Trust stated.

Also on the Shortlist WWF

Winner Most Innovative Use of Technology

NG Bailey

NG Bailey had a problem. The engineering company did not have enough information about low value products that were being purchased, and many were being ordered against the wrong codes in its system.

of the model, and provider Amtech was further challenged to develop the system. The NG Bailey team got in contact with manufacturers to explain the concept and win their support for collaboration.

This led to the wrong products being ordered, wasted time as mistakes were corrected, reordering of replacements, higher prices, and reduced rebates.

The new MyMaterials system is able to set which products are available to order and by whom. An intelligent search function also allows staff to search via commodity or manufacturer groupings, speeding the process up. Use of the system means that 100 per cent of requisitions are now fully coded to item level. Orders placed through the system result in greater compliance to preferred supplier lists, creating value.

The purchasing team determined that the problem lay with engineers who, unable to find the correct product codes on the industry database Luckinslive were entering generic codes or using a ‘free text’ option. The company set about creating a standardised database of industry product codes involving direct collaboration with manufacturers. The objectives were to reduce inefficiency, reduce the uncoded product rate to nil, and ensure compliance to preferred suppliers, therefore lowering prices and improving rebates. Given that the industry database already held around 550,000 product codes, this formed the basis

Judges’ Comments “All too often technology projects make life more complicated, not simpler. This was a great example of procurement getting back to basics and making life easier for end-users, and in doing so driving greater compliance, reducing waste and cutting costs.”

It has also saved the time of the procurement team gathering quotes, and the finance’s team reconciling invoices, lessening the chance of payment disputes. There has been increased choice, with the number of product lines rising from 450,000 to 680,000 and 52 new manufacturers included that were not previously on the Amtech system. This has boosted competition and initiated new relationships. And it also helped to prepare the company for the introduction of Building Information Modelling, which requires more detail on items.

Also on the Shortlist AXA UK

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11 September 2014 Grosvenor House Hotel, Park Lane, London Celebrating excellence in procurement and supply management

Headline sponsor

Platinum sponsor

Official technology provider

Associate sponsor

Winner Best Procurement Consultancy Project of the Year

Jaguar Land Rover & Customs Connect

Import and customs duties are seen as a complicated, rather dry, topic - an “invisible and inevitable cost” of doing business that cannot be influenced. However, an innovative partnership between Jaguar Land Rover and Customs Connect (CC) has challenged this mindset, and delivered excellent benefits to the automotive manufacturer. As JLR expands globally, an increasing number of components and sub-assemblies have to be moved between countries and they all have to be classified for customs and have a duty attributed to them. In addition, data collection and classification management for new components was weak. After investigation by a cross-functional JLR and CC team, they believed the manufacturer was overpaying import customs duty on a small number of high value, high duty components. By getting these reclassified (supported by ‘Binding Tariff Information’ (BTI) rulings, that provide legal clarification), the company could claim money it was owed by HM Revenue & Customs (HMRC). The first stage was to analyse the data, and identify where this would be applicable. Following a review, BTI

applications were made on certain components, and all but one were successful, allowing it to reclaim a total of £32.5 million. JLR and CC decided to fight HMRC’s BTI ruling on the reclassification of a multi-media module in the tax courts. In a closed door hearing - due to the intellectual property involved - the court ruled for JLR, leading to £9 million being repaid by HMRC. CC also identified the opportunity to cut the rate of duty on an ‘integrated audio module’ from 14 per cent to zero. This, and similar efforts in this area, has contributed to a £6 million saving for JLR. CC was employed on a contingent ‘no win, no fee’ basis, and provided other services including ‘real time’ classification opinions for new components, reviewing HMRC reports to manage risk on high value components being imported at a zero duty rate, and providing plenty of off-site training days for JLR staff to pass on their expertise. As a result JLR has received £41.5 million in cash repayments from HMRC, customs duty payments have been cut by more than half and there have been further cash flow benefits.

Judges’ Comments

Also on the Shortlist

“This was a cutting edge project that demonstrated great innovation, and provided competitive advantage to the business in an area rarely considered by procurement.”

Efficio and Network Rail Infrastructure Projects epi Consulting and BT SpringTide Consulting and DS Smith

CIPS SM Awards 2014 23

Winner

CIPS Procurement and Supply Chain Management Professional of the Year

Fabienne Lesbros, Britvic Soft Drinks

After 20 years in procurement professional of the year Fabienne Lesbros is still excited by the role and is intent on driving it to be part of the core business. After beginning her career as a business analyst on the Channel Tunnel project, she was drawn to procurement because of its “unique combination of analysis, strategy, negotiation, commercial acumen and implementation” – and hasn’t looked back. As chief procurement officer at Britvic she raised the bar for the function and inspired others by re-profiling the function through the Britvic Procurement Transformation Programme. It took her three years to move procurement from a tactical team to a ‘leading, business-integrated commercial function’ highlighted by Britvic’s CFO John Gibney as a “streamlined proactive function

Judges’ Comments “Fabienne has led a transformation in Britvic procurement by recognising the importance of people and managing stakeholders, focusing on the need for relationships and influence at a business level. She has taken the procurement team at Britvic and changed real business outcomes, stretching the influence of procurement far beyond the traditional roles of sourcing and category management.”

24 CIPS SM Awards 2014

that uses insight and intelligence to understand our key supply markets, works to minimise risk, secures our long term supply lines and provides a forward looking perspective on materials and services.” The programme demonstrates how Lesbros’ vision inspires others with her team delivering benefits including sustainable sourcing and product complexity reduction as well as delivering half of its original three-year savings target in the first year. The team’s success has been measurable, as Gibney says: “In May 2013, Britvic made a bold commitment to our investors that we would deliver £30m of annual cost savings by 2016 and under Fabienne’s stewardship, procurement has been a driving force in making a material contribution towards this.” Lesbros has designed training and coaching programmes for peers and teams and participates in industry/function forums for peer-to-peer discussions. A CIPS Fellow since 2013, she is working on raising the bar again to ensure Britvic benefits from next generation best practice.

Also on the Shortlist Eskalem Bogale, UN Refugee Agency (UNHCR) Paul Mortimore, Boeing Defence UK Limited David Pyle, Crown Commercial Service

Winner

CIPS Young Procurement and Supply Chain Management Professional of the Year

Owen Standen, Citi

Owen Standen, senior vice president of professional services at Citi, has made a strong impression at the investment bank. According to Jane Ellis, CPO at Citi EMEA, he “moved the dial on our approach to professional services procurement within EMEA”. Supporting his award entry, she says he engaged “challenging” stakeholders in an area where “we previously wouldn’t have been invited to the party”. Standen leads a multi-location team managing more than $200 million (£118.6 million) of spend across legal services, consulting services, business process outsourcing and indirect tax education. Lizzie Mhagrh, Citi EMEA head of professional services procurement, says “as a young and emerging talent within the team, Owen displays a maturity beyond his years and sets an example for his team and his peers in the other categories”. She adds that Standen has been “instrumental” in delivering a number of firsts for procurement. These include generating a long-term relationship with the Citi EMEA legal community to ensure ‘best value’ on external counsel instructions, including leading a deep, proof-of-concept partnership on real estate legal including e-auctioning. He also saved $12.1 million (£7.2 million) after leading a highly intelligent benchmarking analysis on law firm rates and then launched an internal rate-modelling tool to compare and assess the law firms’ rates across 15 specialisms, 142 cities and 62 countries. And he partnered with Citi’s EMEA head of VAT to improve

Judges’ Comments “Owen showed clear leadership and innovation in an Investment Bank environment that can be very challenging. Without a procurement mandate to fall back on, Owen has genuinely made improvements in the way legal services and consultancy has been contracted, winning real buy-in and showing great understanding and influencing what can be very demanding stakeholders.” education within Citi Procurement Services (CPS) by developing a VAT guidance and education handbook for internal procurement category managers. Citi has seen Standen make savings of up to 25 per cent when re-engineering the consulting category. He streamlined the client experience and strategic CPSled tendering of high-value, critical deals. Following his work in raising the profile in procurement at Citi, he and Ellis were asked to give the keynote speech on CPS and consulting services at a strategy day. This was the first time procurement has been asked to speak at such an event.

Also on the Shortlist Steven Linden, Department for Work and Pensions Paul Nyathore, Safaricom

CIPS SM Awards 2014 25

26 CIPS SM Awards 2014 Gerry Walsh, LOCOG

NATO – HQ Supreme Allied Command Transformation

Balfour Beatty

Lisa Callow, Global Brands

Sarah Ellis, BAA Heathrow Airport Olympic Delivery Authority

Jaguar Land Rover

n/a

BDR Thermea

Co-op Group

Stephen Harratt, NHS re:source

Ian Bolger, Thames Water

Premier Foods and British Sugar

International Procurement Project of the Year

Best Procurement Consultancy Project of the Year

Most Improved Procurement Operation – Start Up

Most Improved Procurement Operation – Step Change

CIPS Young Procurement and Supply Chain Management Professional of the Year

CIPS Procurement and Supply Chain Management Professional of the Year

Overall Winner

Adelie Food Holdings

n/a

Wincanton

Neal Brothers

n/a

Best Procurement Initiative by an SME

Chris Morgan, BAA Heathrow Airport

Capita

A&N Media

n/a

Royal Mail Group

n/a

NATO – HQ Supreme Allied Command Transformation

Cancer Research UK

n/a

Best Contribution to the Reputation of the Procurement Profession

Best Supplier Relationship Management

Surrey County Council

Tarmac and Brammer UK

Surrey County Council

Best Public Procurement Project

Network Rail

Everything Everywhere

Adelie Food Holdings and Cawleys

DSDA

Best People Development Initiative

NHS Business Services Authority

2012 Heathrow Airport Ltd

Premier Foods and British Sugar

AXA UK

Best Cross Functional Teamwork

Skanska UK

2011

Surrey County Council

Allied Bakeries

Best Contribution to Corporate Responsibility

Olympic Delivery Authority

2010