SABMiller spends over US$5,000 million a year on materials – mainly malt, barley, hops, glass and cans, but also other essentials such as marketing items and freight. Having previously made these purchases mainly on a regional basis, the group is now exploiting its worldwide scale and creating a centralised procurement organisation to manage this expenditure globally while also retaining the flexibility to buy locally where this is advantageous.
Among its many benefits, global procurement offers greater negotiating power and the opportunity to build strong, collaborative relationships with key suppliers. It also allows the group to optimise and harmonise its specifications to obtain the best quality and value. Procurement processes can be streamlined, expenditure made more transparent and new ideas and developments disseminated more quickly around the group.
The formation of the global procurement organisation is well advanced with a head office now established in Switzerland – a known centre of procurement expertise and within a convenient time zone in relation to the group's global footprint. The organization recently carried out pilot programmes in some of its smaller purchasing categories. These included trade fridges and glassware in Europe and Latin America and other marketing items such as umbrellas, furniture and signage. Despite rising raw material prices, these two programmes produced significant savings on previous expenditure.
As systems are tested and lessons incorporated, global procurement will be rolled out to other, larger categories in 2010 and beyond.
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