Rapid savings ignite Amey procurement transformation
At a time of significant internal change, Amey needed to deliver subsantial savings and procurement was a key focus. Efficio's specialist expertise enabled Amey to meet highly ambitious in-year savings targets. In the process, Efficio's approach helped Amey lay the foundations for a world-class Procurement function.
Amey (part of the Ferrovial Group) is a highly successful provider of public and regulated services, with major clients throughout the UK, US, Australia and Qatar. Its acquisition in 2013 of Enterprise created one of the largest and most diverse infrastructure providers in the UK - but it also significantly increased pressures on margins. Procurement was targeted as a major opportunity to achieve significant savings by the end of 2015. The integration of Enterprise also resulted in a short-term loss of capacity and capability. Efficio was engaged to bridge the gap and drive the rapid efficiency improvements needed to meet Amey's value creation targets.
Efficio launched a rapid tactical sourcing initiative to achieve the required savings goals, which included:
- The development of category and geography-specific sourcing strategies for categories such as Civil Engineering, with tactical negotiation processes at regional or local levels. As well as driving cost savings, this also supported Amey’s localism strategy
- To leverage Amey’s volume in a key group-wide indirect spend category, a single national competitive tender was performed in a very short time frame, maximising the in-year savings
At the same time, Efficio adopted the existing Project Management Office, and augmented it with best in class processes and reporting mechanisms. This gave Amey the ability to develop an effective sourcing pipeline through rigorous spend analysis. It also provided, for the first time, a single source of information on the programme which enabled both Procurement and Finance teams to track savings on a weekly basis and report to the executive board in a highly transparent structure.
During the engagement, Efficio’s approach and tools were shared with the Amey Procurement team continuously, providing upskilling and development opportunities for team members.
Challenging the status quo
Key to the success of the programme was challenging existing perceptions about procurement and the way things had previously been done in the organisation. With the support of the Chief Procurement Officer, Efficio was able to challenge and break down many of those perceptions and demonstrate the benefits of a more strategic approach to procurement, both for individual business units and the company as a whole.
Efficio’s engagement helped deliver a number of significant benefits for Amey, including:
- Over a six month period, Efficio conducted more than 150 negotiation and clarification meetings with over 75 suppliers in 15 different locations throughout the UK
- The success of these negotiations enabled Amey to make a considerable contribution to the savings target and demonstrate those savings to the executive board
Efficio also made a significant long-term contribution to the CPO’s vision of a world-class Procurement function by:
- Establishing a best-practice Project Management Office, including key systems and processes to build on
- Actively and continuously engaging with contract managers in the business, which created a new awareness of how procurement can add value, as well as an increased willingness of business units to proactively engage with the Procurement team to identify opportunities
Due to the success of the project, Amey asked Efficio asked to support a Strategic Insourcing initiative, which is key to Amey’s medium- to long-term objectives – a further recognition of the role Procurement can play in critical business decisions.