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Sainsbury’s was founded in 1869 by John James Sainsbury and his wife Mary Ann. It began as a dairy shop with the promise of higher quality milk and butter at affordable prices.
We therefore resolved to find out more and were pleased when Neil Bradford accepted our invitation to explainalittlemoreaboutSainsbury’sSRMprogramme. Neil is head of procurement at Sainsbury’s and is the architect of the SRM approach deployed by Sainsbury’s procurement team. We met Neil and his colleagues Hannah O’Reilly (Category Manager) and Agnes Guzik (Senior Buyer) at 33 Holborn, Sainsbury’s London HQ. Sainsbury’s procurement is responsible for annual procurement spend totalling over £3 billion across c.2,000 suppliers, 85 of which are part of their SRM programme. How long has your SRM programme in its current form been in existence and what were the key business drivers? Like many organisations we have had SRM in various forms over a number of years and during that time the drivers were almost exclusively commercial. What it took to galvanise the approach in its current form a couple of years ago was the realisation that the ‘low hanging fruit’ in terms of savings were diminishing, and that driving just the savings agenda was not consistent with delivering other corporate objectives such as the 20 x 20 sustainability plan and the five values:
At this time, product adulteration and contamination were commonplace, so by taking a different approach the Sainsbury’s family built a business which has grown to become one of the UK’s largest retailers. Today Sainsbury’s operates over 1,000 stores and employs around 150,000 people, It sells up to 30,000 products produced by over 17,000 farmers and growers, 2,000 suppliers, and reaching over 22 million customers a week. In the year to March 2013, Sains- bury’s reported sales of £24,511m, an increase of 6.8% on the previous year, and declared an increase in operating profit of £51m to £789m. In mid May 2013, State of Flux was invited to attend Sainsbury’s procurement supplier conference at their Holborn store support centre. The event was part of an ongoing communication process to share Sainsbury’s business strategy and objectives with its supplier base. In this particular case, the key suppliers engaged in their supplier relationship management (SRM) programme and a number of others. The agenda included the usual business updates and some inter- esting insights into the relative performance of the main players in the supermarket sector, as well as Sainsbury’s strategy for continued growth. The second half of the event focused on Sainsbury’s 20 x 20 sustain- ability plan and in particular ‘Sourcing with Integrity’ as one of the five values that provide the framework for the plan. You can learn more about Sainsbury’s 20 x 20 sustainability plan and Sourcing with Integrity by visiting www.j-sainsbury.co.uk/responsibility/20x20 Another feature of the event was the 2013 supplier awards recognising contributions made by suppliers to the key five areas (pillars): risk and governance; commercial; innovation; quality and service; and 20 x 20. There might be a sense that supplier awards have fallen out of favour over the last few years, possibly as a result of inconsistent behaviours and treatment of suppliers leading to a certain amount of cynicism. However, it was evident (at least in this gathering) that this formof recognition is still something that suppliers value. From talking to a number of supplier represent- atives at the event, it was clear that suppliers engaged in Sainsbury’s formal SRM programme and those close to it believe it is delivering a different and more produc- tive relationship.
› Best for food and health › Sourcing with integrity › Respect for the environment › Great place to work
› Making a positive difference to our community The question we had to answer was how to engage more effectively with our supplier base to deliver a broader range of benefits, consistent with Sainsbury’s corporate strategy. If an SRM project does not set out with the objective of improving service and quality to customers and colleagues, it will not gain the busi- ness support that is integral to the delivery of successful projects. Our departmental ethos for procurement is customer, colleague and company first, function second.
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