Eagersaver.com - (chapter 1. Page 26) Eagersaver.com was established in 2005 by the CEO Colette Bevan as an
online comparison site primarily focused on car insurance and related products. Since then it has grown, both organically and by acquisition of other companies into an organisation that now compares home insurance, legal insurance, pet insurance, travel insurance, life insurance and accident insurance. It has diversified into other comparison services in financial products, travel services and utilities. It has moved offline with the opening of call centre activities and a TV shopping channel. The company’s turnover is £100m. The Managing Director Dirk Bradfield now wishes to float the company on the stock exchange and following a due diligence exercise by Colette’s corporate advisors she has been advised to ‘professionalise the procurement activities throughout the group.’ The due diligence uncovered the following facts: Dr Yousef Amer - School of Engineering 4 of 34 University of South Australia o There are five locations within the UK, situated at Chester, Edinburgh, Sheffield, Bristol and Cardiff. They work independently and only one location has a Purchasing Manager (TV shopping channel). o The largest spend across the group is on marketing (£12m online and £8m TV). o Marketing is centrally managed by the Marketing Director. o Most other procurement is undertaken by service heads including IT and agency staff. o Numerous media companies are engaged often without competition. o The same or similar products and services are procured from different suppliers. o There is a range of prices paid for the same product or service, some ranging by ±30%. o Most contracts are under the vendor’s terms and conditions and in some cases there are verbal arrangements. o The company has outgrown many of its original supplier’s who are finding it difficult to cope with demand and there are instances where contract performance has slipped. o The Chief Executive is responsible for many of these problematic relationships based upon personal friendship at the inception of the company. You have been appointed into the new position of Group Procurement Director and have a meeting arranged with Colette to discuss the way forward. In considering your plan, how specifically would you deal with? 1. Structuring the procurement activities 2. Rationalising the product and supply chain 3. Managing the Marketing Director who states corporate expenditure is his budget and he will decide who has the last say on contract awards 4. Managing the expenditure attributed to other Service Heads.
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