Source : Procurement Leaders
UK supermarket chain Morrisons has said its indirect procurement programme has made ‘good progress’ during a year in which inflationary effects placed pressure on prices in the supply chain.
The programme has a target of saving £100m by 2013/14 and, according to the group’s annual report, has delivered £40m of benefit.
“We reviewed every area of spend - both revenue and capital expenditure, and looked at a variety of ways to reduce cost including the use of e-auctions, rate negotiations, consolidating spend and reducing consumption,” the report indicated.
Examples of savings achieved include the renegotiation and re-specification of packaging across stores and manufacturing, the consolidation of waste contracts across stores and packhouses and a significant reduction in marketing print costs.
The group also undertook an exercise to reduce the build and fit out costs of new stores, opening the first ’Lean Store’ at Newport in November and achieving a saving of £2m, the equivalent of around 30% of the total store build and fit out cost.