Procurement Strategy Development and Implementation for Anthony Nolan
As part of a new, ambitious five-year strategy, Anthony Nolan reviewed its commercial operations early in 2011 and identified procurement as an area that needed improvement if it were to achieve its goals.
Anthony Nolan is a very successful charity whose mission is saving lives. The charity created the world’s first register of people willing to donate their stem cells, saving lives by matching donors to patients suffering from leukaemia or other blood-related disorders. It now runs the UK’s largest and most successful stem cell register, with over 400,000 potential donors, and set up the UK’s first dedicated facility for cord blood banking and research.
With an external spend of over £6million, in a turnover of around £30million, Anthony Nolan identified the procurement of services and supplies as a potential opportunity to make significant savings that could contribute to its mission of saving lives. Anthony Nolan considered appointing a Procurement Manager but, unsure that the savings could be realised, decided a permanent post could not be afforded.
Verve Consulting had already worked with Anthony Nolan on facilitating the production of the charity’s commercial strategies in 2011 and began talking to Alan How, Finance and Resources Director of Anthony Nolan, about its procurement strategy.
Following proposals from Verve Consulting, and satisfied with Verve’s procurement credentials, Alan appointed Verve for a first phase trial project of up to 3 months: “We know Verve well, trust them and like their outcomes. We decided to engage Verve for a trial procurement project with the assurance that the cost of the project would be covered by savings made, or the charges for the project would be reduced.”
Working closely with Anthony Nolan’s staff, Verve analyzed the procurement processes and examined the procurement spend in great detail. Verve then developed a procurement plan that identified where savings could be made and, perhaps most importantly, confirmed that savings were achievable by undertaking a “quick win” procurement assignment that covered the cost of this first phase trial project.
Achieving the quick win involved Verve in gaining an in-depth understanding of the spend and existing suppliers for the service selected, applying procurement techniques to the buying process, identifying a range of strategic buying options and the competitive position of potential suppliers, then launching a series of request for quotations (RFQ’s). This detailed and methodical process led to a successful outcome for Anthony Nolan with immediate savings made available.
Having identified in the trial that savings were possible and achievable, and with the price of the first phase covered by the quick-win cost savings, Anthony Nolan awarded Verve a six-month strategic consulting project to implement the procurement plan.
In the implementation phase Verve systematically applied procurement techniques to the areas where the greatest possible savings had been identified. This covered a range of services and materials bought by Anthony Nolan including the recruitment of donors, the laboratory analysis of donor samples, specialist clinical couriers and the collection of stem cells from donors.
Verve established relationships with all the key stakeholders responsible for buying the services and materials in the scope of the procurement plan, ran workshops with the in-house teams to pull together a coherent approach to the potential suppliers of each of the services or materials, allocated clear responsibilities for specific suppliers, set up tender processes, and negotiated with suppliers. The implementation of the plan has led to the successful delivery of annual savings of over £500,000.
Alan How, Finance and Resources Director of Anthony Nolan explains, “Verve has delivered an extremely successful project for Anthony Nolan. The result is a large annual cost saving that allows us to expand our services and help Anthony Nolan to achieve our goal of doubling the number of lives to whom we give the chance of life.”
Verve Consulting’s work with Anthony Nolan on the procurement strategy has helped the charity appreciate the importance of sound commercial principles and attention to detail in obtaining maximum value from its supply chain. With those philosophies in place, and proof that savings can be made, Anthony Nolan is now confident in recruiting a Procurement Manager. In this next phase of the development of the procurement strategy, Verve will continue to be involved, both in the recruitment of the Procurement Manager and in the subsequent mentoring of the procurement function.
Summing up Verve Consulting’s overall contribution to the procurement strategy, Alan added, “Verve brings a maturity of approach and a high level of professionalism that has achieved successful outcomes within a contained cost, which is extremely important for a charity like Anthony Nolan.”