Case Study: Game changing thinking to transform waste management services in London
Landscape
Our client is one of the most recognisable organisations 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 was self-delivering waste management services to over 250 locations and nearly 400 collection points. The organisations 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 along-side quality of service.
Proxima were engaged to bring an external perspective and explore the impact and benefit of a range of options including:
- Full in-house service optimisation
- Full outsource of all services
- Outsource of medium and low risk locations and in-house optimisation of high risk
- Regional outsourcing and optimisation of in-house services for local locations
Whilst the client was open to change, the procurement team frequently had difficulty in driving adoption and change programmes which impacted the (unionised) workforce. The time frame for project completion was twelve weeks.
I’m really chuffed with this and we have come up with a balanced, intelligent approach
Internal programme sponsor
Our Procurement Transformation Approach
The internal procurement team was undergoing a transformation 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 some 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, something 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 and driving the project at pace and managing risks. The supply market was confident that it could deliver the required services, manage the high risk locations and provide 24/7 support but there were considerable people cost challenges.
Outcomes and Deliverables
Once our procurement transformation team had done their part, the client selected a hybrid solution: outsourcing some locations and optimising in-house solution to deliver costs 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. The recommendations of the project were validated by all key stakeholders culminating in endorsement from the MD and his leadership team following board presentations. A further benefit was the coaching provided the culminating in the developed internal team member empowered to explain the strategy and recommendations to the board, an achievement singled out for praise by the MD.
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.
