Co-op Group

Co-op Group
Investment in training is creating a common language for managing
supplier relationships in the Co-op Group. But the move did not start from
within procurement.

In May 2016, the Co-op Group announced plans to take 70,000 members of staff through a ‘Back to being Co-op’ training programme. The member-owned group, which can trace its roots back to 1844, wanted to help educate colleagues about the benefits of membership and reconnect them with its heritage.

But it was not only staff who attended the education programme. In an entrepreneurial
move, the IT supplier management team suggested some of its vendors also attend,
as part of a plan to help bring them in line with the core values of the Co-op Group, an organisation with businesses covering insurance, legal services and undertaking,
as well as retail.
The move to take suppliers through the organisation’s values training was a way
to help ensure the Co-op Group is not putting its reputation at risk by working with partners who do not understand its approach to ethics. It attracted interest from outside IT, says Alexis Batey, the group’s IT Supplier Relationship Manager. “It got us a lot of attention from the executive team. We were trying to say, ‘Let’s look at suppliers in a different way, not just as commodities, but as organisations that can add true value to the Co-op.’”
Batey had been leading an SRM programme in IT for a couple of years and saw how the
Co-op Group’s image could be better used to its advantage. “The Co-op has a significant brand reputation which we can leverage and we do not do so always do so. One of my ambitions is to make IT at the Co-op the most ethical IT in the world; I cannot do that unless we have partners who are prepared to add value at every stage,” she says.

Developing a common language for SRM

As part of this programme of work to improve SRM, the IT team helped introduce
training for individuals from across business units whose roles in some way involved
supplier management. The work started in 2014 when the IT team took part in a groupwide review of contracts after the upheaval that followed the financial crisis. As the audit continued, IT was highlighted for its maturity in contract management. It worked on hygiene factors with IT suppliers, creating a framework and a segmentation model, Batey says.
However, to take the model further and apply it to suppliers outside IT, the team felt it needed a common language for SRM. Many organisations across the group were engaging suppliers, but described the activity in different ways. The IT team approached other departments which had already developed some kind of supply management strategy to see if they were interested in contributing to, and taking part in a company SRM training programme. General insurance, IT and capital projects expressed an interest.
The team approached the International Association for Contract & Commercial Management (IACCM), a professional certification organisation, to develop a skill matrix that everybody could work to. From September 2016, State of Flux delivered the training as part of its partnership with the IACCM. It took 16 people through practitioner training, 16 through advanced SRM training, two people through the contract and commercial training and 22 through the fundamental training, Batey says.

Real supplier case studies

The courses were challenging but in a thought-provoking way. In the advanced practitioner training, for example, we focused on organisations we were already working with to form the content for thecourse. We could immediately apply the training to the suppliers we knew. All of a sudden we were putting structure around risk registers and KPIs. We were looking a levers and how to use them to add value. We were thinking what mini-business cases might look like with real suppliers,” she says.
“The courses were led by a State of Flux practitioner. We did not want computerbased training. We wanted it to be faceto- face, not just sat at a screen. That way, people can have a conversation and talk through the issues. It made sense because the main purpose of the courses was that we all came out speaking the same language,”Batey says.

Tackling real supplier case studies 

The benefits to the Co-op Group were threefold, she adds. Firstly, greater awareness
of best practice in SRM would help protect brand value; it would help assure suppliers
were up to the Co-op Group’s standards of ethics. Secondly, contract leakage: around 9% of contract value is lost during the delivery phase. It was the desire to ensure suppliers were kept on track and the Co-op Group leveraged its brand value whenever possible. The last benefit was to raise the capability of the individuals working in supplier management to show the Co-op Group is investing in employees and help attract the best talent to the organisation in the future.
An example of how the IT team applied the training comes from a project to transform IT services and support. The Co-op Group had intended to issue around seven RFIs for the service. However, following the SRM course, it decided to invite the leading suppliers in the field to a thought-leadership morning. The IT SRM team explained to the suppliers why they were brought in, where they could add value and what the potential reward might be. If the suppliers were able to work in partnership and help define a service that was more beneficial to the Co-op, then the eventual reward would be greater,” Batey says.
In addition she says, the Co-op Group is working suppliers harder, encouraging them to bring more innovation to their services. One example comes from joint work between the Co-op Group and Microsoft, which resulted in the retailer building a store in the software giant’s UK campus in Reading. For Microsoft, it was able to showcase its latest artificial intelligence technology in a real store, with an ethical partner. Meanwhile, the Co-op Group gained access to the latest advances in retail technology.
In August 2015, the Co-op Group appointed a new CPO, Fabienne Lesbros, who is a strong advocate of SRM. She has created a procurement academy, which is taking the foundation work around SRM and SRM training and applying it to other areas of the business, Batey says.
Among consumers, the Co-op Group believes it is well positioned to take advantage of the trend towards ethical trading. With training helping to create a consistent approach to SRM, it is leveraging this reputation to increase the value suppliers provide.