126
Sainsbury’s SRM pillars
INNOVATION
20 x 20
COMMERCIAL
RISK & GOVERNANCE
QUALITY & SERVICE
Cumulatively, these four areas of focus lead to the fifth – commercial benefits. If we are doing the right things that improve service to our customers, make our colleagues’ lives easier and respect the environ- ment, then commercial benefits for both parties naturally follow. Each of the pillars are important to us - our buyers are given the flexibility to work with suppliers and agree which pillars to focus on. Innovation and 20 x 20 (sustainability) have probably driven more projects than the remaining pillars thus far, which echoes Sainsbury’s focus on corporate sustainability. As a result of this approach we now have a much broader range of projects being undertaken. We don’t need to push this, they just seem to land naturally. Consistent with the broader range of projects, we now have a wider range of stakeholders that understand and are actively engaged in SRM. What would you say the biggest single factor in achieving this transformation has been? It has been a combination of things, but if I had to choose one, it would be the removal of savings targets related to SRM activities. For the first year or so we maintained a 10% cost saving target for SRM activity. It seems obvious in hindsight that this would narrow the focus of activity and drive the wrong behaviours. Recognising that SRM still needed objectives we switched to a simple approach whereby each buyer has an objective to complete three SRM ‘case studies’. In practice these often deliver both direct and indirect commercial benefits but it’s no longer the constraint it was seen as previously. SRM is now seen as more of a vehicle for risk management, sustainability and innovation.
It’s certain that sourcing with integrity is a key driver for us. Some of the higher profile initiatives are obvi- ously those that relate to sustainable and safe food production, but in our part of the business we have a big responsibility to deliver targets around reducing the environmental impact of our operations, e.g. reducing operational carbon by a relative 65% by 2020 as compared to 2005*. SRM simply felt like the right way of approaching this both from a corporate and procurement perspective. * ‘Absolute’ emissions reduction targets are defined by the GHG Protocol as goals to ‘reduce absolute emis- sions over time’. Relative emissions reduction targets are defined as goals to ‘reduce the ratio of emissions relative to a business metric over time’. In the case of supermarkets, the relative is defined as relative to square footage of stores. What are the key principles and approach to SRM in Sainsbury’s? SRM at Sainsbury’s has five areas of focus: 1. Improving the quality of service or product offered or used by customers and colleagues. 2. Looking for more sustainable and environmen- tally friendly ways of working, both for our communities and those which our suppliers serve. 3. Innovation – We want to be the company who suppliers want to bring their new ideas to. We are always willing to trial new products or concepts from trusted suppliers. 4. Risk management – Learning more about the supplier’s marketplace and what risks their business faces, as well as sharing our own best practice.
Powered by FlippingBook