29 October 2022
Topics in this article
  • Government & Public Sector
  • Transformation

Our client is one of the most recognizable organizations in the UK, helping over 1 billion passengers to travel in and around London each year.

Challenge

The client operated in a service-critical environment and self-delivered waste management services to over 250 locations and nearly 400 collection points. The organization’s waste strategy focused heavily on service excellence: the in-house service ensured reliable collections, with 98%+ on time. However, the client wanted to assess total value and ensure that the operation delivered value for money alongside quality of service.

Approach

Proxima was engaged to bring an external perspective and explore the impact and benefit of a range of options, including:

  • Full in-house service optimization
  • Full outsourcing of all services
  • Outsource of medium and low-risk locations and in-house optimization of high risk
  • Regional outsourcing and optimization of in-house services for local locations

While the client was open to change, the procurement team frequently had difficulty driving adoption and change programs that impacted the (unionized) workforce. The time frame for project completion was twelve weeks.

The internal procurement team was transforming, with a number of potential team members identified for development. With this in mind, Proxima deployed an SME to work alongside a member of the in-house team, providing category and soft skills training as the project progressed.

Upfront, our SME spent “a night on the bins” to get to know the team, understand what they did, and hear first-hand about their challenges, ideas, and aspirations. We then undertook soft market testing, seeking input from six suppliers, including national players, local specialists, and a fully integrated cleaning and waste provider. All of the discussions were conducted with representatives from the delivery team, giving them a key voice in the discussions and specification, which was new in approach.

This switch in commercial focus and approach identified opportunities for innovation and in-house improvements to deliver the service requirements for less. Proxima used its deep understanding of supplier capabilities and critical analysis of how revised client costs would compare to the supplier-delivered services and hybrid models.

Proxima’s procurement transformation team worked closely with stakeholders from various business areas, sharing our unparalleled category insight, driving the project at pace, and managing risks. The supply market was confident it could deliver the required services, manage the high-risk locations, and provide 24/7 support, but there were considerable people cost challenges.

Results

Once our procurement transformation team had done their part, the client selected a hybrid solution: outsourcing some locations and optimizing in-house solution to deliver cost savings of over £1m (c. 25%), as well as additional value improvements: a reduced in-house team, reduction of locations serviced in-house and cash benefit from the sale of several trucks. All key stakeholders validated the project’s recommendations, culminating in an endorsement from the MD and his leadership team following board presentations. A further benefit was the coaching provided, culminating in the developed internal team member being empowered to explain the strategy and recommendations to the board, an achievement singled out for praise by the MD.   

I’m really chuffed with this and we have come up with a balanced, intelligent approach

Internal programme sponsor

To find out how you could benefit from some procurement transformation, get in touch and we’d be happy to talk you through our offering.

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