THE BUSINESS REVIEW FOR PROCUREMENT LEADERS
Since 2001, British Airways, like most global airlines, has been in serious cost-cutting mode. It has axed 13,000 jobs and taken out £450 million in annual operating costs. Silla Maizey, BA’s procurement director, admits that a “tough love” approach – rather than winning hearts and minds – has been to the fore, although that is changing now that the airline is profitable again.
At other more diverse and decentralised companies, such as the US conglomerate Tyco, the “big stick” approach is less of an option. But Kai Nowosel, a former global purchasing head at Aventis, believes that even in centralised firms, it is a mistake to dictate. “Users feel threatened by that and try to find ways around you,” he says.
Given the differences in size, structure, culture and fortunes among organisations,
what are some of the common success factors in terms of purchasing governance?
Here are 10 suggested by those interviewed for this article:
1. Involve senior executives.
2. Demonstrate value.
3. Listen and seek buy-in.
4. Give category responsibility to business heads.
5. Adopt a customer-service philosophy.
6. Be tough in some categories.
7. Know when to walk away.
8. Share targets and plaudits.
9. Make it easy to comply.
10. Tackle persistent offenders.
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