TNT Express, emanating from Thomas Nationwide Transport and a merger with Deutsche Post, is listed on the Amsterdam stock exchange and is the oldest transport company in Australia.
In 2007 ADR Australia were invited by TNT Express to review procurement in the Australian operations and put forward recommendations for improvement.
TNT operates on a functionally decentralised basis with each of the functional areas responsible for procurement activities. A shared service function manages spend for certain categories used across functions.
The aim was to identify and implement procurement improvement opportunities in the business and enhances skills of all who buy to minimize the total cost of ownership or acquisition costs.
A current state analysis, focusing on organization and structure, people and skills and processes and practices was undertaken by ADR to identify the improvement opportunities and guide the implementation of best practices and skills development.
The recommendations from the current state analysis included process improvement covering cost, category and risk management, and skills development.
Responsibility for procurement was retained in the functional areas where the expertise resided.
Common ways of working were implemented through skills and process development workshops attended by key stakeholders, functional experts and staff tasked with procurement responsibilities.
The workshops included tactical skills, strategic sourcing tools and analysis and negotiation.
Cost measurement and reporting was implemented and the profile and successes of procurement efforts were made visible across the business.
A procurement skills workshop has subsequently been developed for depot staff who are tasked with buying responsibilities.
The procurement improvement project continues to deliver value to TNT through effective sourcing project management and cost reduction.