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With more than five million members and customers, LV= are the UK’s largest friendly society delivering insurance, investment and retirement products. They help people look after the things they love in life. Their family, their home, their car and their pets.
All strong brands have a clear point of difference. The LV= difference is that they combine the behaviours of a mutual with the performance of a PLC. They summarise this internally as ‘sharp with a heart’.
With over 5,700 employees working in 17 offices across the UK, LV=’s vision is to be the UK’s best loved insurer. For their customers, they make sure they are caring, easy to do business with and offer great value.
SUPPLIER MANAGEMENT AT LV= In 2009, a procurement transformation programme was initiated under the leadership of Tom Lewers. Tom’s challenge was to take LV= procurement from an undervalued capability to a level of defined and recog- nised commercial excellence in four years. In less than two years, not only was the rebranded LV= sourcing capability influencingover 70%of total spendcompared to 5% in 2009, it was awarded the CIPS best purchasing operation start-up award. As Mike Rogers, LV= CEO comments, “leadership at its best, embracing our mutual values and delivering a blueprint of commer- cial excellence. A masterclass in strategic sourcing”. This phase of transformation was sourcing focused (business requirement through to contract execution). In 2011, the transformation programme extended its scope to include supplier management (contract execution through to relationship exit). Supplier management was not on the LV= strategic agenda. There was no dedicated supplier management resource. Many of the high risk and high spend contracts were not being formally managed. Service delivery, supplier performance, contractual risk and relationship issues were often not being resolved. The fullest value negotiated prior to contract signa- ture was not being realised through the term. Tom says, “we wanted to quickly understand who our strategic suppliers were and set a strategic goal to be formally recognised by these suppliers as their customer of choice, to unlock innovation, defined value and capability”.
The LV= executive committee approved the imple- mentation of the supplier management framework. The LV= board were briefed and supportive. Executive sponsorship was key. A business case was approved to invest in a central supplier management capability reporting directly into the CIO. Sourcing and supplier management was formed. The team tuned into the CIO priorities; each priority required effective supplier management to deliver successfully. CIO set five core objectives: 1. Create strategic alignment between all business units to foster an environment of innovation and collaborative working. 2. Increase capacity and capability to deliver large- scale change in a predictable and reliable way – at the right price and the right quality. 3. Create a service delivery environment that meets business requirements – namely stability, customer service and future growth. 4. Leverage our existing partners and suppliers to optimise their value and potential. 5. Invest in the development of our people to ensure CIO has the right skills and capabilities to deliver against ambitious plans.
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