Argent Energy needed to review their processes and systems for the ordering and payment of goods, services or works. We enabled Argent to identify process improvements and savings opportunities and implemented a cost-saving procurement strategy which could be used to deliver commercial activities across a wide range of core areas. In addition to benefits realisation, following our review, Argent Energy now also have more time to focus upon SRM and strategic procurement activity.
Argent’s current ways of working and team structure operated on a tactical and transactional basis. In summary, the activity was focussed on reviewing quotes and raising purchase orders. The challenge was to support the team to improve their systems and processes, reduce costs and enable the function to be more strategic in their approach.
We undertook a procurement review exercise, which involved interviewing a wide range of stakeholders across the business. Following this, we drafted a 6-month plan to develop the procurement strategy across the business. The four key areas of focus were:
1. Procurement Policy and Procedures
We firstly implemented a whole new suite of procurement documentation. This included the creation of a Procurement Manual and Contract templates for Goods, Services and Works. We then implemented associated policies and set expectations surrounding key procurement processes. New ways of working were implemented which enabled the team to work on a priority basis and ensured no duplication of activity.
2. Savings Opportunities
We provided category-specific market intelligence across various categories, identified savings opportunities and negotiated better pricing on behalf of Argent. A rolling procurement programme was implemented which ensured addressable spend is now tendered every three years. On-site support of the tendering process (from scope to delivery and contract management) was provided across multiple sites.
Key suppliers were targeted for a proposal that details the service levels and discounts they can provide for 12/24/36 month contracts. For high volume suppliers, we implemented a weekly/monthly PO per supplier to allow the team time to focus on strategic procurement.
3. Governance and Reporting
Following our guidance, Argent have now implemented Power BI which has been key to identifying savings opportunities and process improvements.
Standard KPI measures are now also being added to key contracts and are being reported back as a balance scorecard to support process improvements.
4. Right size review
We identified that the team needed to shift from a Purchasing function to an Indirect Procurement function. Following training and development, the team now focus more on Business partnering with stakeholders rather than admin processing.
Formal tenders delivered savings benefits whilst also reducing the commercial risk to the organisation.
The implementation of new key suppliers to Argent has given the team the ability to focus on strategic procurement activity, whilst showing true bottom-line savings.
Moving forward the team has more time to focus on Supplier Relationship Management activities, to ensure the continued success of the contracts being implemented.
The Barkers Led Procurement transformation at Argent had an immediate positive impact. The Barkers team positively engaged with the business and helped deliver procurement improvements to the indirect categories of spend. These changes enabled a step changed for how procurement was viewed across the business.– Nicola Dean CFO Argent Energy Ltd
- Nathan Davies – Senior Managing Consultant
- Ben Copeland – Consultant
- Warren Kozera – Partner
November 2019 – Ongoing