SRM should be done in the business; however, it is still procurement led. If we were not, it would fall away again.” Ladbrokes engaged State of Flux to build a framework to improve its SRM capability and also conduct a Voice of Supplier study to help understand how Ladbrokes was perceived as a customer by its most important suppliers. The consultancy set out a more consistent and joined-up approach to managing critical suppliers and a more formalised assessment of risk in the supply base. It also created an SRM handbook that defined a way of working and offered a selection of tools to improve dealings with suppliers across the business. An important element of this new approach was the implementation of an SRM technology solution to enable more effective and efficient working with suppliers and internal stakeholders. MANDATINGSRMFORTHEBUSINESS Supported by senior management, Ladbrokes’ procurement teammandated that all the relevant stakeholders had a plan for SRM and a framework for meetings and governance. It measured risk and performance of suppliers using the State of Flux technology platform, Statess. A more recent development has been to start working with the Statess innovation module, although it is yet to implement this across the business, Cockburn says. The gaming firm also used the information it had gathered via the Voice of the Supplier study to understand how it is seen as a customer and how it might unwittingly add to suppliers’ costs or inefficiencies. It held two supplier forum events to help them understand the new way of working. “We’ve invested heavily in SRM because a lot of the suppliers we deal with are very niche to the betting and gaming industry. There is nowhere else to go, so the relationship is critical to delivering services to the consumer,” Liz Cockburn Head of procurement
Leading UK betting and gaming firm Ladbrokes has hit its £18million three- year savings target 12months ahead of schedule since beginning its SRM transformation in 2014. But for that success to continue, it must not be treated as a one-off programme, insists head of procurement Liz Cockburn. “You can’t just run it once and walk away. You have to keep going. It is a very iterative process and involves reinforcing the same messages to the same people. You need to walk the talk and not let it go, otherwise people naturally drift off and go back to old behaviours,” she says. Cockburn and her procurement team were confident that savings were ripe for the taking because of the nature of Ladbrokes’ supply market. The betting and gaming industry relies on a narrow group of suppliers and Ladbrokes pays around 70% of its external indirect spend of £350 million to between 45 and 60 suppliers. As such, there is limited scope for competitive tendering and it soon starts to show diminishing returns, but procurement can still find savings and other sources of value through a more cohesive approach to working with suppliers and better management of the relationships with them. NICHE INDUSTRYSUPPLIERS “We’ve invested heavily in SRM because a lot of the suppliers we deal with are very niche to the betting and gaming industry. There is nowhere else to go, so the relationship is critical to delivering services to the consumer,” Cockburn says. But Ladbrokes had taken a fragmented approach to these suppliers. “We had lots of silos talking to the same vendor in different ways,” she says. The executive board supported procurement’s new approach to SRM, but to succeed the programme needed backing frommanagers further down the hierarchy, an altogether greater challenge, says Cockburn. “We had the executive buy-in to be more joined up. Where we struggled was the next level down in management. They asked, ‘Why does procurement need to be involved? We’ve been doing this ourselves for years.’ That was the challenge. We believe that, for Ladbrokes,
Ladbrokes faces the challenge of extracting more value from a niche set of suppliers. It finds technology can help SRM gain the support of stakeholders and achieve long- term benefits.
70% Ladbrokes pays around 70%of its external indirect spend of £350million to between 45 and 60 suppliers. Cockburnandher procurement team wereconfident that savingswereripe for the takingbecauseof thenatureof Ladbrokes’ supplymarket.
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