With no fewer than six catering and hospitality businesses to its name, the most recognised of which is contract caterer BaxterStorey, it would be a slight understatement to say that WSH’s procurement team is kept on its toes.
As well as procuring food and produce for its daily catering operations, the unit also has responsibility for recommending, specifying and buying items of kitchen equipment used within the various sites it manages.
Andy Milner, the group’s new procurement and supply chain director, has just been hired from the Gondola Group to lead WSH’s nine-strong buying team and he is focused on making sure that operators receive every ounce of support they need, whether they’re sourcing bottles of Coca-Cola or high-end commercial cooking equipment.
“We operate a very decentralised purchasing model in WSH, so we encourage our operators to make decisions themselves in terms of where they buy products,” explains Milner. “My job really is to support them with a framework that enables them to make the right decisions with the right suppliers based on price, service and I guess provenance. BaxterStorey, particularly, makes a big play on that in terms of being local, fresh and British. How that extends to kitchen equipment is probably not that easy, but certainly the food and drink credentials are one of the reasons why we have been successful as a business.”
In terms of its contract catering endeavours, WSH is used to the fact that the kitchens its staff operate in are generally owned by the operator. But when it comes to making decisions about the type of kit installed at sites, WSH’s procurement team still remains actively involved. For projects, it will work directly with the dozen or so design houses that typically carry out most of its schemes.
Milner believes there is scope to finetune the equipment selection process. “In this particular area, I certainly see a lot of opportunities for myself and the team to get closer to that decision-making process to strengthen that framework within which the operators are making their decisions around equipment, the selection of design house and whether the product is fit for purpose,” he says. “That is really where my involvement will be and will strengthen.”
The diversity of WSH’s portfolio means the buying team’s exposure to suppliers and distributors varies from one day to the next. High street cafe chain, Benugo, for instance, is owned by the group, so all its kitchens are its own fit and spec, and WSH works directly with distributors to get the lay-out right.
On the contract catering side, though, it may be going into a site where it is working with the previous incumbent’s kit. It will invariably bring in its own equipment to do the job, but generally the footprint tends to be fixed, requiring a “horses for courses” solution, as Milner describes it.
“That also extends into vending services, deli bars, and kitchens that are open planned,” he adds. “We are very keen to show our skills and products. We are very much about fresh, so if we can operate with open kitchens then we will look to do that, but as you can imagine that is not always possible in certain premises.”
Milner joins WSH with 11 years of purchasing experience, serving as head of supply chain at Gondola and prior to that logistics manager at Pret a Manger.
One of his first tasks has been to get to grips with the differences in business model. At Gondola, which counts PizzaExpress, Zizzi and Ask among its brands, Milner’s team was responsible for dealing with manufacturers, while the property team would work closely with the project managers on site when opening new restaurants, liaising with a small number of contractors responsible for installing nominated manufacturers’ kit. As WSH doesn’t have a property team, it comes down to local operator level and ops director level in terms of how things work.
“We have got a higher number of stakeholders than I would have been used to in my Gondola days, so the creation of that procurement framework and the rules of engagement are even more important because you can’t possibly reach all these people at the same time. Therefore, working with that framework is very important.”
When WSH officially announced Milner’s appointment last month they stated that one of his primary objectives would be to develop more strategic relationships with suppliers. So what is that likely to involve?
He says: “I want to create longstanding relationships and that is built on a mutual understanding of business needs. I think that it is very easy to judge a value based on a price, particularly in procurement of equipment, however the true cost of the equipment is really over a period of time and by creating those longstanding relationships with those particular suppliers you get to understand the performance, the cost, and whether it is fit for purpose. Food products and drink products are very immediate.
"Equipment, by the very nature of what it does, is not something that you can make a decision on and then forget about it. You have got to look after it, monitor it, and be aware of market innovation at the same time. Working with the right suppliers is particularly important in this area.”
Milner says WSH would always encourage operators to tender jobs with a small number of nominated suppliers, which in the first instance would normally be the design houses. He believes that his team’s responsibility is threefold: to make sure that process is working; to ascertain that suppliers are being evaluated on the right criteria; and to strengthen the link between manufacturers and its business.
“I think working with design houses, sometimes you are one step removed from the manufacturer, and I would like us to get closer to the manufacturer and establish stronger links with those guys, and then [the project delivery] flows through the design house,” he admits.
While Milner’s desire to engage more closely with manufacturers might leave some kitchen houses feeling nervous, he says that internally it is vital for ensuring that what the company is buying is right for the business.
“I guess from a commercial point of view it is not easy for me to understand at the moment how much we have procured from Williams or Foster, for example. What I would like to understand is, what is our spend with those manufacturers and our design houses, and are we challenging our design houses enough on where they are sourcing the equipment from? Also, are we having direct dialogue with those manufacturers to make sure they are aware that type of kit is going into our location and that it is the right piece of kit? It is just about opening up the box a little bit, creating that clarity,” he adds.
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It would certainly appear that suppliers can expect to see significant changes to WSH’s purchasing strategy moving forward. So what is Milner’s overriding message to the supply chain?
“I think to date they probably haven’t had a lot of interaction with my team because of the autonomy that we give to sites. I think the change will be that we will have more of a direct dialogue with both manufacturers and design houses as a procurement team, to put stronger relationships in place, create that clarity, and provide our operators with a toolkit to give them the right decision-making framework. I would certainly say there is going to be more interaction. We will look to strengthen existing relationships but also work with the right people for the future. That could mean tenders, different contractual arrangements, but it certainly involves working closer with the kitchen equipment people.”
No doubt the one question on every supplier’s mind is how much budget Milner and his team have at their disposal for 2013.
“It fluctuates really,” he answers. “It very much lies with the local site, so if we are tendering for a job we will include an element of capital expenditure within that which relates to the kitchen equipment piece. I guess we are experienced now in terms of how much we think jobs will cost, so we will always go into a job with a budget. We know what we spend, but it is about understanding what we spend it on and whether we are getting the right value. We opened the best part of 400 new locations last year, so to keep track of that is very difficult, which is why if my team can create a framework that gives our operators the right toolkit then they can go ahead and do that.”
One thing’s for sure: suppliers can expect greater scrutiny as WSH sets about driving up its procurement standards.
Westbury Street Holdings’ new procurement and supply chain director, Andy Milner, discusses the finer points of sourcing commercial catering equipment.
On the challenges of buying equipment for such a diversity of businesses…
“There are common pieces of equipment going across the group, certainly. In terms of our criteria, I think it boils down to commercial [factors] but for me it is about the price over time and having the ability to evaluate that easily. And I guess it is also to do with creating the tension in the right places, which for me is around the design, the installation and the kit that is put in. I would just hope that our suppliers understand the ‘fit for purpose’ element and are not giving us a standard piece of kit all the time.”
On the importance of energy efficient equipment…
“It is particularly pertinent to us because we make a huge play around corporate social responsibility in terms of our food, how local it is, and food miles. If you extend that into the kitchen equipment with leading-edge products, we sell our food credentials so why not the kit that we use? How you measure the sustainability with parity across the piece is quite challenging, however. We do lead on food and drink in terms of our offering in our sector, and the challenge to our suppliers is how do we do that in equipment?”
On the significance of rising energy costs…
“Bills would normally sit with the operator, but if we can sell to our client that the kit we are putting in is going to save them money then it strengthens our case to win the job. And I think when we win a contract we don’t see our investment for being the term of the contract; when we win a contract we want to be in there forever, so we wouldn’t make short-term decisions around procurement based on the term of the contract either.”
On leasing equipment versus buying equipment…
“We do lease, but only really equipment that is for particular events or occasions, such as barbecues, and that is very much at the client’s behest really. Again, though, another piece of work I am keen to do this year involves looking at our hire contractors and understanding if we are getting it from the right places, if it the right piece of kit, and whether we can standardise in any area that helps us to work with a longer-standing relationship.”