A Daily "Thought"

6/25/2005

Procurement Success @ the Royal Bank of Scotland

One of RBS's success stories has been based on its' procurement principles (Courtesy of the Financial Times). They are as follows:
-Concentrate IT, processing, telephone, property and purchasing functions in one "manufacturing" divison so athat divisons delaing directly with customers can concentrate on winning new business;
-Hire procurement and supply-chain experts from a broad range of industries as staff, not consultants, so that the company can exploit best practice;
-Standardise the equipment used throughout the business, such as flat-screen computer monitors, then use the group's purchasing power to achieve maximum economies of scale;
-Do not focus solely on price. Encourage the group and its' suppliers to look at maximising value, if necessary by re-engineering processes inside or outside the bank;
-Allow suppliers to make a decent profit, so they will be available when needed;
-Streamline underlying processes, then differentiate brands by offering additional customer services
All of these are common sense principles that can help any organization succeed in saving hard-earned dollar.
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