Origin completes the Implementation of an E-procurement solution for Laporte Chemicals in just 90 days.

Laporte plc develops, produces and markets chemicals for customers in niche markets around the world. Sales last year amounted to £905 million with an operating profit of £132 million. The Laporte group includes a total of over 50 companies world-wide, each with its own unique supplier base. Laporte decided it needed a common procurement strategy to link these internal group companies, and so approached Origin UK for advice on how they could make savings by implementing an e-procurement solution. After consulting with Laporte, Origin UK chose Ariba software for the project. The starting point was a pilot project based in the group’s London headquarters, which focussed on e-procurement of ‘indirect’ materials, a stationery supplier, Corporate Express. Andrew Stevenson, Ariba Project Manager for Laporte plc, explains, “The stationery pilot project is the first of four separate projects aimed at the MRO side of our materials procurement business. We will be targeting Laboratory Supplies & Safety Equipment next, followed by Packaging, then Promotional items.” “Originally, there were 15 suppliers of stationery across 12 of our group companies. All group companies now buy their stationery from Corporate Express using their on-line catalogue, with the benefits of economies of scale. ” “Laporte spent £50-£75 million last year on total MRO purchasing. This ambitious project to link all our internal group companies will take years rather than months to complete, the stationery procurement project is just the beginning. But we hope to start achieving an ROI within 2 years, with savings of 7.5% [that’s a saving of between 4 and £5 million],” says Stevenson. The pilot project with Corporate Express was completed on-time within 90 days, and was only slightly over-budget. IT Manager for the pilot project, John Blissett, had to overcome a few hurdles during the pilot though. “One problem we had to overcome was bandwidth. The Ariba software put a tremendous strain on our existing IT infrastructure and networks, and so we are awaiting a new release of Ariba software which requires a smaller bandwidth.” Blissett also recalls problems with supplier e-catalogues. “Getting suppliers to produce and maintain their e-catalogues is very important to the success of the project. The sheer size and the content of the catalogues needs careful planning.” The problem of ‘rogue’ purchasing will also be eliminated as a result of the Ariba implementation. Stevenson explains. “Buyers were sometimes procuring items outside of the approved supplier list. The Ariba software will only allow them to procure items from the list of approved suppliers on the database. The system reporting function also allows management to measure where purchasing are spending their money and to plan their overall expenditure better.” This successful 90-day pilot goes some way to proving the doubters wrong, who believe that e-procurement solutions are a ‘long winded’ and costly option for manufacturers. Laporte has no plans at present to procure direct manufacturing materials over the web, but Stevenson predicts that, “the Ariba software will be able to cope with any type of e-procurement activity, whether it be a stationery supplier or an actual supplier of chemicals.” It appears that time, and some investment of course, are their only barriers here. Laporte’s Clive Rankin sums things up quite nicely, “Laporte is implementing these systems in order to eliminate rogue purchasing , get the best value from our suppliers and reduce the costs of running our businesses. Origin has been able to take us through this initial pilot, understanding our organisation, culture…and what we need from suppliers to make this a successful start in our e-procurement strategy.”