CIPS Fellows Ride The Mail Rail! (And Learn About Royal Mail Procurement …)

The CIPS Fellows events calendar is very impressive these days, thanks to Shirley Cooper and her dedicated associates on the committee. (Can you spot Shirley in the picture here?!)

And last week saw around 30 people taking their life in their hands with a trip on the “Mail Rail”. Well, maybe not their lives, but certainly it was not to be recommended for claustrophobics! (See picture, taken from inside one of the tiny carriages.)

The Mail Rail service ran from 1927 until 2003 as an intrinsic part of the London mail handling and distribution service, moving post around central London in 6 miles of 9ft diameter tunnels 75 feet  beneath the city, from Paddington to Liverpool Street.

Now you can take a ride on the train, and stop at a couple of the old stations where short audio-visual presentations tell you about its history. (See picture.)  It is all very well put together, informative and enjoyable, and we also got a chance to have a look at the Postal Museum over the road, which again is well designed and interesting. The whole package is £17 to members of the public, which seems quite a lot, but it is a unique “attraction” and genuinely fascinating.

 

The business part of the evening was a very good, pacy presentation from Helen Wilber, a senior executive in the Royal Mail procurement team. She gave us a run through the key issues facing the business and procurement, and managed to make it just as must fun as the train ride (well, almost ..!)

Annual third-party spend is around £2.4 billion, and the procurement team is based on a category management approach, the firm has faced intense competitive cost pressure with the opening up of mail services – there is a “strategic focus on cost”, Wilber explained, which of course is good news in some ways for procurement.

One way the procurement function has responded is to introduce a “pool” system. So around half the “core” procurement team (aside from people doing the strategy, systems, analysis etc.) are category subject matter experts with their own defined domain; the other half, the “pool”, are attached to different categories and projects for shorter periods of time to help manage the fluctuating demand effectively.

That is not just an interesting way of handling resource pressures, “it has been great for the people”, Wilber told me. Generally, they really enjoy the variation, and this step has given for procurement managers the opportunity to look at new categories where they were previously aligned to a specific area of spend.  It’s a model worth considering by others, we’d suggest.

From a technology point of view, SAP Ariba is the “core” platform, but the Statess product from SRM experts State of Flux is used alongside that - we have covered that very much as a system to support SRM, but Royal Mail use it principally as a contract management system, and Wilber praised its ease of use.

The balance between cost reduction and supporting growth and innovation is another key challenge for procurement. As we said earlier, Royal Mail has to be a low-cost provider now as its markets have been opened up and the letters business is in long-term decline. However, technology and innovation also must play a bigger and bigger part in the business. Think about the way parcels (a growing market) can be tracked and customers are offered flexibility on deliveries; aspects of the business that did not exist a few years back.

So procurement must seek to achieve those quite different goals, and as an organisation that still plays a major part in the British economy (and has a place in many of our hearts), ethics come into play too. Wilber gave two examples of where sourcing decisions were made based on ethical issues, including asking a supplier to terminate dealings with a subcontractor that failed an un-announced, independent factory audit which raised serious concerns about its approach to worker safety. Such actions  cost money, but were “the right things to do”.

So all in all, this was an enjoyable evening, with good networking, some useful business content – and of course the “Mail Rail”.

Voices (7)

  1. Mr Grumpy:

    Sounds a good idea Peter and look forward to reading your thoughts.

    When I was first introduced to CIPS and FCIPS was explained to me, I saw it as the highest honour bestowed on a procurement professional that represented a high level of achievement and contribution to the shaping and evolution of the profession and for me it would be massive if all members had some form of access to the views and experiences of Fellows because if there is one thing life has taught me that learning anything from the best out there can only be a good thing and have and even improve a procurement professional’s approach and skillset. I have always felt an enormous sense of pride and fulfilment when sharing my experiences and knowledge with others and I can only imagine that Fellows would feel the same if they reach a wider audience.

  2. Mr Grumpy:

    Good to see my membership fees keep indulging the elite.

    It’s about time they did away with such extravagant events for elite members and put that money to better use that supports the wider CIPS community.

    1. Peter Smith:

      I’m pretty sure the Fellows events are not subsidised by CIPS – it cost me £25 last week for the evening, which did include a bit of pizza and a glass of wine to be fair… Certainly subsidised a whole lot less than the Branch network and meetings. You are entitled to object to the elitism thing though but you might make the same point about the whole concept of professional institutes!

    2. Mr Less Grumpy:

      Jealousy won’t get you very far Mr G Rumpy. I would suggest completing your FCIPS application and joining the fun.

      1. Rick Anstis:

        And remember that Fellows pay annual subscriptions that are always set at higher rates than Corporate Members pay, by quite a margin: Fellows pay £47 per annum more in the UK, currently; and pay much, much more than Student Members: Fellows pay £114 per annum more than Students in the UK, currently. And the great majority of Fellows – and of all other Member Grades – never attend any CIPS events at all. So, you could argue that Fellows subsidise the rest of the Membership, rather than the other way around.

        1. Mr Grumpy:

          I do take that on board Rick and personally, I oppose the higher fees Fellows have to pay (maybe the romantic in me). You could argue Fellows subsidise, but Student Members could argue otherwise in relation to the perks of that level of membership (straw clutch) and even associate members (if that still exists).

          Peter made a good reference to the branch events (my neck of the woods that doesn’t exist) and you yourself on the CIPS events which both in my experience lack decent turnouts. Something I hope changes in the future.

          First part of my comment was made tongue in cheek. Troll-esq if you would.

          1. Peter Smith:

            Mr Grumpy, your first comment was an excellent one as it has provoked a good debate! I might even write something about CIPS Fellowship, and / or the Branch issue – the discussion has raised some interesting points.

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