Boots, one of the best known retail names in the UK, committed to an ambitious programme to reduce costs by £100million, with £30 million of savings to come from procurement of indirect goods and services.

Business Challenges

• Implement a cost savings programme to fund key business investments and revitalise its customer offer
• Establish best practices in procurement
• Increase profitability
• Establish strategic procurement organisation for indirect spend

Solutions

• Implement end-to-end procurement solution: strategic approach, fundamental process change, structure and system changes, balanced scorecard for performance measurement, buyer and end-user portals
• Establish central Procurement Services Unit (PSU) for Boots UK and Ireland
• Programme management by joint Atos Consulting / Boots teams

Benefits

• £15m in annualised cost savings realised in the first nine months. Savings of £34M delivered in year 1 against a target of £30M
• Sustainable year-on-year results being delivered e.g. £22M in year 2 and £23M in year 3
• The PSU is on now target to deliver £100m since its creation in 2001. This is an excellent example of leveraging strategic procurement techniques to drive profit improvement or providing a source of funding for business wide transformation programmes
• Development of a team of high caliber skilled procurement professionals embedding strategic category management process and supplier QCLDM performance development programme
• Buyer portal set up on Boots intranet to continue on-line education for both buyers and end-users
• In 2002 the project won the MCA and CIP's awards for strategy and business transformation and procurement excellence respectively