Mark Barnett is chief operations officer at the Consortium for Purchasing and Distribution Ltd, which offers procurement and fulfillment principally to the education/training, and social care markets, mostly in the public sector.
‘The big thing for us as players in the public sector’, says Barnett, ‘is the need to create sustainable logistics solutions. By that I mean combining the social, environmental, and economic aspects in our supply or value networks. Getting this balance right is crucial for our industry and for our position in the marketplace.’
Barnett says most people equate sustainable with environmental, but there is much more to it than that. ‘The economic and social aspects are about our culture, our people, the values of our organisation. We like to describe our business culture as sustainable.’
‘This is particularly pertinent in our industry. Our end-users are generally not purchasing or logistics professionals so it’s up to us to find ways of adding value for them beyond breaking bulk. That means looking at all aspects of the value network and striking a balance between the economic, social, and environmental objectives of our customers.’
But, being the public sector, this isn’t always easy. Barnett says the savings and waste issues that figured in the recent general election campaign have created paradoxes. ‘The public sector has targeted savings and has recruited a significant number of professional buyers, but it has focussed them on price, not cost. Aggregation of demand has been encouraged, which in itself is a good thing but it’s being done on a commodity line basis. That makes it more difficult for people like us to offer a one stop shop approach that might reduce overall costs as opposed to specific prices.’
So, how does that work? ‘Typically, the procurement people have a target, say the stationery budget, and they go out to tender or to e-auction and end up with a large number of preferred suppliers for different sub-categories that all internal users should be using. This creates problems, typically in logistics rather than procurement. The situation is made worse because government has targets for the use of eprocurement that often conflict with other social and environmental targets such as the desirability of supporting local businesses or SMEs. This doesn’t serve these other targets well: more to the point, it tends to drive more cost into the system. For example, you get more deliveries of smaller orders, you get a pressure on distribution costs – made more acute by factors such as fuel costs and the Working Time Directive – and this creates a hidden cost that will inevitably find its way back to the customer. But it’s all driven by the central emphasis on price and aggregation; it ought to be based on the characteristics and needs of the internal end-user.’
Barnett suggests this is or should be a big issue for public sector purchasing people. ‘In the shortterm they are achieving big price benefits but the costs created will come back to haunt them.’
He suggests that other areas of effective public service delivery are being compromised, too. ‘We deal with a lot of schools. The last thing teachers want is to be spending time on purchasing or goods receipt. The current system means that to get price advantages, schools are having to accept multiple small deliveries which takes teachers away from teaching, drives cost into the system and probably disrupts the school day.’
Part of the answer, Barnett believes, lies in consolidation and working with supply chain partners or even competitors. ‘Frontline public sector people should be able to get everything they have ordered in one delivery, whoever they are buying from. This is a real logistics challenge but it’s one the retail sector, for example, has met by managing or even outsourcing the distribution chain. SMEs, which are what individual schools or care centres amount to, can’t do that.’
- Mark Barnett joined a bank after school but soon changed direction in favour of buying and production planning, in which roles he has worked in sectors as diverse as cable manufacture, medical products, and lingerie manufacture.
- He joined the Consortium for Purchasing and Distribution as a project manager and worked his way through warehouse management, logistics management and supply chain director to his current role as chief operations officer.
- Mark is 41 and a member of the Chartered Institute of Purchasing and Supply.