Willett Limited - a case study

Willett Limited provides coding and labeling machines and associated consumables. Willett has 19 operating companies in Europe. The labeling and coding machines are manufactured in Corby, UK. The organisation has recently been re-structured and the new European structure is region based.

Assessment

In 2000 CY Associates were invited to review the Purchasing Processes and Procedures of the European Sales Companiesto ascertain if Willett's purchasing strategy had been implemented and to see if it was robust and cost effective. Prior to the re-organisation each country had been responsible for its own purchasing our role was to look at all the Willett companies in Europe to see if Willett were achieving economies of scale and delivering consistent and measurable savings. The main areas covered during the audit were:

Personnel were interviewed from the UK and Germany. Austria, Benelux, Italy, Russia and the Ukraine provided information via e-mail and telephone conversations.

Findings

By following CY's purchasing audit procedures we identified a number of strengths, weaknesses and potential opportunities for cost savings and business improvements. The key points are outlined below.

A "them and us" culture existed between Head Office and the Regional Sales Offices so some of the purchasing initiatives dictated by Head Office had been ignored by the Regional Offices: such as the car leasing deal and buying of component parts.

A number of Purchasing activities were carried out in isolation from other offices/units within the organisation as the Purchasing Policy or written guidelines where not followed, in some instances the staff did not know the Purchasing Policy existed.

Very few Service Level Agreements were in place therefore there was concern that the stock levels of certain products may become too high due to the uncertain delivery schedules from suppliers.

The purchasing function is seen as a transactional necessity that often hinders the process by which goods and services are acquired as opposed to proactive, dynamic and value adding.

Summary

The assessment of the processes and procedures by CY Associates highlighted the improvements that could be made to reduce costs and improve the supply chain. The development of a central database would be beneficial in the rationalisation of suppliers, products, and a set of common administrative processes. This will subsequently lead to a reduction in costs due to economies of scale and streamlined processes. Willett Limited would benefit from the management and direction provided by a centrally co-ordinated function focusing on the following areas: