The power of procurement
Project Sponsor
Propelled by procurement Inside Flybe’s supply chain overhaul
Written by Catherine Sturman Produced by Richard Durrant
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Director of Procurement & Finance Business Partnering, Richard Young, on how Flybe has transformed its procurement operations 4
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lying from more UK airports than any other regional airline, Flybe offers a customerfocused, cost-effective and time-saving advantage over its competitors. The company has undergone a significant transformation to become the airline of choice. Recognising the growing importance of procurement across its operations, Director of Procurement & Finance Business Partnering, Richard Young has streamlined Flybe’s internal processes to become more seamless and deliver increased value to its customers. Responsible for engagements relating to all commercial and contracting matters with external suppliers, Young has undertaken a thorough overhaul of Flybe’s direct and indirect spend, including its aircraft fleet acquisitions, disposal and financing activities. Driving efficiencies Young has spearheaded transformational change across the procurement department, helping to
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Flybe’s fleet consists of 81 aircraft
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ensure its position as an increasingly pivotal participant in key strategic decisions made by the business. “We’ve undergone quite significant transformation, a part of which has been to centralise procurement. It’s moved away from individual departments doing their own buying to a much more strategic function. We are now involved in all activities relating to supplier expenditure, be it IT or marketing, engineering or maintenance, becoming a business partner to all our internal stakeholders. “We support all departments to improve security of supply and drive better value,” he continues. “We’ve also organised ourselves in a category management structure, where individual procurement team members are accountable for chosen areas of spend. Their specialist knowledge adds value that makes a more effective procurement experience for our business owners.” As a result, Flybe has gained increased clarity across its procurement functions, enhanced its knowledge and capabilities and delivered significant cost reductions across the business. “Technology has really been at the heart of these changes, and it’s been an enabler to help us improve delivery,” says Young.
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Technological capabilities The company’s three-year transformation has impacted all areas of the business. Throughout its ‘Back to Basics’ project, Flybe enhanced its back-office capabilities, focusing on three main areas – finance, HR and procurement functions. “Driving out cost was only part of the motivation,” notes Young. “One of the key aims was also to improve
governance and compliance and improve the general quality and availability of data that, in turn, would better support decision making.” As such, the overhaul of Flybe’s centralised procurement systems has been a key part in contributing towards an improvement in sustainable business processes. “In actioning these improvements, we conducted a comprehensive
“Technology has really been at the heart of these changes, and it’s been an enabler to help us improve delivery” RICHARD YOUNG, Director of Procurement & Finance Business Partnering, Flybe
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sourcing process involving a Request For Information (RFI) and a Request For Proposal (RFP), looking at both integrated enterprise resource planning solutions as well as best of breed systems with the added need for them to be integrated with one another,” explains Young. “We elected to go down the last best of breed route as we felt that presented a better
overall fit for our business.” In the procurement area, investing in Wax Digital’s web3 source to pay (S2P) solution has enabled Flybe to gain meaningful cost savings, streamline sourcing and purchasing processes whilst establishing improved governance and controls relating to supplier engagement. “We have also invested in Cleardata’s off site invoice
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Flying high with Sage Business Cloud Why Europe’s largest regional airline designed its business transformation with Sage Business Cloud Enterprise Management at its heart When Flybe launched its ‘Back to Basics’ initiative, the quest to build a fully integrated solution using best-of-breed technology for finance, HR and procurement led to the airline adopting Sage Business Cloud Enterprise Management (formerly Sage X3). “The ultimate goal was more visibility and control by refining and redesigning how we did things across the business,” says Flybe’s finance systems manager, Matt Julyan. “We wanted to make things faster, more efficient and eliminate any potential failure points in our procedures.” To accomplish this, Flybe designed an integrated network of best-of-breed business software solutions, including web3, AMOS, Airpas and iTrent, with Sage Business Cloud Enterprise Management’s finance capabilities at the heart of these interconnected solutions. “Sage is at the core of our system’s design,” Matt says. “It monitors the financial performance of everything we do, so any interconnecting software has to work with Sage.” Supported by the real-time data integration solution Talend, Flybe has created a platform that integrates with industry-specific functionality from a carefully selected range of software – including Sage’s enterprise management.
A platform for progress Placing Sage’s enterprise management solution at the centre of its system provides Flybe with numerous benefits, including the ability to introduce best-practice financial processes. “Sage’s finance functions are built around industry best practice,” adds Matt. “We are now planning to improve, and Sage will be a valued partner to help us on this
journey so our employees can really see how much it benefits what they do.” This ties into Flybe’s aim of driving business-wide consistency and uniformity, as Matt explains: “One of our objectives was to implement a solution that could automate as many financial processes as possible to ensure process consistency. Where needed, the Sage system gave us effective controls to steer and limit those processes.” But the creation of Flybe’s Sage-centred system brings far more than a change of process for the airline. “It’s much more than a change of method,” Matt explains. “The usability of Sage Business Cloud Enterprise Management means employees are far more self-sufficient. “For example, we’ve now got the ability to create bespoke reports within Sage. People no longer have to rely on a specific person to do it for them.” And continuous business improvement is a core focus for Flybe, as Matt explains: “Where there are changes to the business, we have people dedicated to managing them. My team takes responsibility for making sure the finance system can deliver exactly what the business needs now and going forward.”
Partnering for success To ensure Flybe could achieve the aspirations of its ‘Back to Basics’ initiative, the company turned to its long-standing Sage Business Partner Datel to evaluate Sage Business Cloud Enterprise Management. The solution was selected as best-ofbreed for the financial element of the solution. From there, Flybe and Datel embarked on implementing the Sage software and integrating it with the other selected applications.
“Datel has been our Sage support partner for over 25 years,” Matt says. “We had built trust in them from previous experience and knew Datel could deliver what we wanted.” Flybe also decided to adopt Datel’s Managed Services offering to support the business in its focus on continual improvement. “Sage is such a core component for us, and it’s key for us to embrace the rich functionality and best business practice it offers,” says Matt. “Datel’s managed service is absolutely critical and gives us access to the expertise we need, allowing us to further develop our knowledge of the Sage software. We’ve become more self-sufficient and confident in Sage Business Cloud Enterprise Management thanks to the Datel team.”
The same partnership that supports Flybe’s Sage system also assisted with the integration into that system, as each solution constantly exchanges vast volumes of critical information, “Sage’s integration flexibility has been beneficial as we have designed interfaces to fit with the wider systems design,” says Matt. “Having a partner that understands and can implement Sage on that basis is proving to be very beneficial, especially given the complexities of a best of breed solution. “Datel’s support gives us the confidence we need to continue to improve our processes and drive business efficiency.”
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F LY B E Employee engagement is valued highly by Flybe
Flybe operates a fleet of 81 aircraft – 56 Bombardier Q400, nine Embraer E195, 11 E175 & 5 ATR 72s and was recognised as the most punctual UK-based airline in the latest report on ‘Best and Worst Airlines’ issued by leading consumer watchdog Which? in January 2018.
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processing solution to reduce on-premise invoice handling and also Sparefinder’s data tool to help standardise our non-aircraft materials and service master data.” Additionally, Flybe has invested in new technology in its HR areas, procuring iTrent from Midland HR along with a new Finance platform utilising Sage’s X3 software. Lastly, the decision to implement specialist airline aviation system AMOS (in the engineering maintenance arena) and Airpas to process direct operating cost transactions, will further enable operational efficiency. Young explains
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Procurement automation takes off at Flybe Optimising spend, streamlining supplier management, reducing risk and ensuring best-value purchasing across the business; why Flybe has implemented Wax Digital web3 Source to Pay.
Integrated supplier master data All master supplier and contract data is hosted in web3, fully integrated with Flybe’s Sage X3 finance system Procurement time and cost savings An end-to-end electronic procurement process cuts manual workloads and administration costs Increased efficiency and output
Powering our source to pay processes with web3 brings around 2,000 vendors with an annual spend of several hundred million pounds under management. All our supplier and contract master data is managed in web3, fully integrated with Sage X3 and our airline-specific direct procurement systems such as Airpas and AMOS, so we’re now in total control of supplier data quality and risk management. We expect significant and ongoing cost savings for the business. Richard Young Director of Procurement and Finance Business Partnering, Flybe
Flybe is doing more with less, running sourcing events more frequently to identify cost savings for the business across a wider category set Improved compliance and risk mitigation Electronic supplier due diligence and on-boarding, with all supplier master data stored centrally, alleviates supply chain risk in a heavily regulated industry Enhanced supplier negotiations Using web3 Contract Management, automated alerts stop contracts rolling over so Flybe can renegotiate terms and prices to ensure suppliers continue to deliver great value Supporting strategic initiatives As part of a long-term aircraft fleet review, web3 drives efficiencies in purchasing process with manufacturers across the world
Hello. We are Wax Digital For the past 17 years we’ve been providing innovative procurement and spend management solutions to help organisations reduce costs, achieve greater efficiencies and improve spend compliance and control. Our web3 software is used in over 100 countries, with 260,000 users managing £23bn of spend annually.
w .waxdigital.com flybe.com Let’s talk about your next eProcurement project. Call us on 0333 323 1187 w or w visit
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“We employ different sourcing strategies and test the market more frequently when looking at commodity products” RICHARD YOUNG, Director of Procurement & Finance Business Partnering, Flybe
that as part of the ‘Back to Basics’ project, all new systems are being integrated through the use of data extraction technology from Talend. “We’re now at the benefits realisation stage,” he says. “The majority of the systems are now implemented. We selected solutions based on a number of factors including functional and cultural fit, vendor flexibility and cultural alignment with Flybe’s core values.” Enhanced value The investment in technology and subsequent benefits
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has also transformed Flybe’s relationships with its suppliers. “We have relationships with over 2,000 suppliers, many of which are, of necessity, strategically long term when relating to the supply of mission critical goods and services,” notes Young. “For others, where there may be multiple supply options, we employ different sourcing strategies, testing the market more frequently when looking at commodity products like office supplies and IT hardware. “Being a publicly-listed company, it is critical that we adhere to agreed corporate governance and that the
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new technologies we have employed are paramount in achieving the overall compliance that is so necessary in managing and maintaining relationships with both new and existing suppliers,” he continues. “This allows us to mitigate any potential credit risks on the supply side whilst at the same time making the overall source to pay cycle more operationally efficient.” Customer focus With the General Data Protection Regulations set to become enforced within Europe in May,
how will this impact Flybe’s operations going forward? “This is mission critical to our business and we are taking it very seriously,” observes Young. “To ensure compliance, we continue to invest in talented people and technology across all relevant areas of our business to ensure that we have covered off all foreseeable eventualities. “We are also naturally monitoring Brexit developments closely,” he adds. “The most important thing for us is to receive clarity from the Government; however, we don’t fly
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point to point within mainland Europe, which means we are less exposed than others. “Of course, no one really knows truly what the impacts are going to be, but nevertheless, because we do operate in Europe it is something that we are preparing for.” Flybe would not be where it is today without the commitment of both its dedicated staff and loyal customer base. “We are passionate about the regional communities we connect and serving them is at the very heart of our business. This is our purpose – our mission,” concludes Young.
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Richard Young MCIPS, MBA, BA(hons), has over twenty years’ procurement and supply chain experience gained in a number of industrial and consumer facing businesses across manufacturing and service sectors. He started his career recruited onto the graduate management scheme of British Steel plc (latterly part of the Tata group), where he was quickly promoted and moved through the ranks being sponsored to complete an MBA at Warwick University. He spent several years in the third party logistics industry managing operations for Sainsbury, Pedigree Masterfoods and Nestle, before moving on to senior procurement leadership positions for Ideal Heating (formerly part of Caradon plc) and African Minerals, where he worked extensively overseas. He joined Flybe Group plc in 2014 where he has led the transformation of the procurement function having more recently taken on additional responsibility for property & estates, aircraft fleet financing & trading and finance business partnering. Married with two children, outside of work he enjoys cycling, hill walking, music and travel.
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New Walker Hangar Exeter , Devon EX5 2BA From UK only: 0371 700 2000. From outside UK: +44 (0) 207 308 0812 www.flybe.com