Rethinking finance and procurement processes to align with a wider business change programme

Proactis sat down with Tim Middleton, Project Manager of Royal Mail Properties & Facilities Solutions (RMPFS) to discuss how RMPFS has implemented a transformational change programme which focuses on enabling the organisation to work faster, leaner and smarter.

Proactis: Please can you give us a little bit of background about the organisation?
Tim: RMPFS is responsible for upgrading and maintaining all Royal Mail sites (including office blocks, mail centres, delivery offices). We employ around 2,800 people across sites that are spread across the UK, from the south of England to the very top of Scotland.

Proactis: Can you explain how RMPFS is structured?
Tim: We are made up of three main functions:

The Engineering Services department designs, maintains and manages all the essential services for Royal Mail – such as ventilation, lighting, fire and security systems and water. The Group’s main aim is to ensure mail is delivered every day. There is also a national service centre which takes calls from the Royal Mail environment and dispatches engineers to fix any problems. Any outage in any area of this service would cause problems and costs down the line.

Soft services is responsible for cleaning and office management, which can range from one-off services to contracted work.

We also have a manufacturing group that works on building and creating post boxes.

Proactis: Was it RMPFS that was responsible for painting post boxes Gold after the Olympics?
Tim: Yes, we’d get a call in the evening if someone had won a gold medal. This meant that a certain area needed a post box painting. It was quite a logistical challenge, knowing where each post box is and who was available to paint it!

Proactis: RMPFS undertook a programme called Smart Engineering, can you explain a little about this?
Tim: The ultimate goal of the programme was to deliver efficiencies around the Group. The actual target was an efficiency increase of 15%, and the programme consisted of four major streams around the engineering group:

Changing the resourcing model to give engineers more site ownership, resulting in each engineer taking more pride in how each site is looked after.
Changing the way planned maintenance jobs were carried out and moving to a more standard method. This was to make sure the right people were allocated to the right jobs at the right time.
A new work planning tool, to build up a huge database of engineers (where do they live, what are their skills, etc.) so that they can be allocated more efficiently.
Implementation of a new procurement tool. The main focus of this was parts. Previously, an engineer would go out to a job, realise they needed a part and have to stop the job. They’d have to drive to the nearest retailer, purchase the part, drive back, and complete the job. This was highly inefficient with a lot of wasted time. Also, these purchases were being made on corporate purchasing cards so there was no visibility of what was being bought, and at what price. The majority of these parts were purchased at high, retail prices.

The whole process was very paper and resource intensive. Paper receipts alone were overwhelming and someone had to go through them all on a monthly basis to reconcile and assign the costs to a job.

Proactis: So you decided that a change was needed. Can you talk us through the role of technology in the process and behaviour changes?
Tim: Royal Mail engineers use tough-books (ruggedised lap-top) with job-management software. Jobs are sent to the device, the engineer opens them, does the routines and responds to any questions. We wanted to make use of this technology, but also wanted to make sure we also did the best thing from a procurement perspective.

We worked with Proactis to introduce an ‘order parts’ option in the software being used. This opens up Proactis and presents the engineer with a template where they can start to build their purchase orders. All information is pre-filled, and the solution links directly to the relevant catalogues. Parts can then be ordered at pre-agreed prices. While the order is being processed, the job is put back in the queue so engineers are not wasting time purchasing parts. This represents a huge efficiency saving.

The order then goes out to supplier, with a link so that suppliers can fire up the order and enter a delivery date. This means jobs can be rescheduled accordingly.

Proactis: What have been the key changes in Finance and Procurement as a result of the programme?
Tim: There are actually three main groups in the central function that have been positively affected by this:

The Buying team
Now, instead of receiving hundreds of pieces of paper, emails, or phone calls with part requests, the new catalogue system, which contains 80% of all parts that have been ordered in the last 12 months, means engineers can simply select parts themselves, enter their requisition, and if they have the right levels of authorisation, can order the part from the supplier. The result is that the Buying team can now concentrate on the more value add tasks. Additionally, if necessary, engineers can take a photo of any new parts and the Buying team can look for these more specialised parts.

Procurement team
The new system means that the Procurement team no longer needs to deal with lots of queries from suppliers, and can now focus on renegotiating contracts, and getting the best prices and terms for items being bought. This has resulted in huge savings, while freeing up time to more effectively manage the catalogues, including onboarding new suppliers to give engineers options, at agreed prices.

Accounts Payable (AP) team
On the whole, invoices now match the POs as this whole process is done through the catalogues (at fixed prices). Instead of receipting just from the invoice (with no proof of delivery), as done previously, the engineer has to receipt the goods, and highlight any non-conformance - the AP team can now focus on real queries. About 60% of invoices now go straight to payment.

RMPFS is well on the way to achieving its efficiency targets, and Proactis is proud to be part of the financial and procurement transformation programme.