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All articles / How the University of Birmingham transformed catering procurement

How the University of Birmingham transformed catering procurement


by Peppa Sheridan 10 June 2019

The University of Birmingham is one of the UK’s renowned universities, offering diverse opportunities for study and research. A global reputation, quality learning and teaching, excellent facilities, a stunning campus and great city are some of the reasons making the University of Birmingham a great place to study and live.

Nic Mander, Director of Catering at the University of Birmingham has achieved a great deal since starting in post six years ago.  Having previously managed operations for various national high street restaurant chains, such as ASK and Hard Rock Café, as well as managing retail food and catering sales for Selfridges, he’s brought a wealth of experience to the University’s catering operations, which service the needs of high volumes of people on a daily basis.

With over 37,000 students and 8,000 staff members, the University could be likened to that of a small town – having to cater for the varying tastes and choices of a huge number of people in 43 different outlets, throughout the course of the day. 

To make everything operate like a well-oiled machine takes a great deal of management, processes and controls.  Nic heads up the overall function, and behind the scenes  is an army of operational catering team members and chefs, backed-up by an extremely active production kitchen and onsite bakery, food stores and logistics to get deliveries and produce from A-to-B without delay or confusion.

Confirms Nic, “There is no denying that the University of Birmingham campus has a terrific catering offer. We’ve got plenty of choices to help our students, staff and visitors refuel, recharge and relax. Of course, to make this all come together takes a great deal of management and team work and when I joined the University, it was quite obvious to me that many of the processes were manual – from the way we ordered food and managed stock to the way we transacted it.”

At the time of Nic joining, the University was working with 44 suppliers with a total catering spend extending to £4m per annum.   It was processing in excess of 18,000 invoices every year, which involved a team of six people to administer just the function of processing invoices alone.

Continues Nic, “Due to the high volumes of orders and suppliers, it drove a high team count of administrators to process paperwork and so one of my key aims from day one has been to systemise our approach, and implement a purchase-to-pay platform with central accounting that would enable us to have better control and efficiencies over the entire function.”

“For me, it was paramount to achieve a cleaner financial reporting structure, in a single portal, where all catering procurement could be centralised for improved control and transparency.  I initiated a full OJEU tender, defining what we wanted the solution to look like; a fully integrated purchase-to-pay system, including centralised billing, full supplier contract management, stock control with support on nutritional and allergen requirements.”

“A number of interested parties responded to the tender and having gone through the process of review, the final solution that was decided on was from Pelican Procurement – a specialist catering procurement company that has been operating in the market for 30 years.”

 

>>A Phased Approach   

                                                                                                                     

Having appointed Pelican as its procurement partner, the initial focus was to review the University’s existing supply chain, as Nic explains: “A major first step was to review our supply chain and we mapped out a tendering regime for all product categories, which Pelican subsequently handled for us.” 

“It took us from January 2018 to May 2018 to have all contracts reviewed, live and listed, which is particularly swift and not something we could have done ourselves within the same timeframe.”

During the go-live period, Pelican arranged for team members to be on the ground to directly support the University’s operational team, and to ensure suppliers were delivering what they should, when they should, meeting compliance and agreed contractual KPIs: “This was particularly helpful,” adds Nic.

The second phase was to roll-out Pelican’s centralised, online Pi system.  The team spent time working together to get everything loaded into the system; from agreed products, contractual pricing, to aligning product catalogues with the team, adding all the chef’s menus, and link all products to recipes in order for nutritional and allergen information to be automatically applied to each recipe.

An extensive training programme was undertaken to ensure all team members were up to speed with the Pi system.

Explains Nic, “Many processes were previously on paper – for example, chefs would write a list of what products they needed and it would be handed over for someone to pick-up and arrange. With Pi, we needed to get everyone on board and familiar with the system, particularly as we have a variety of IT skills across the team.  A programme was arranged which was led by Pelican, and then supported by ‘power users’ in our own team.”

 

>>The Outcomes

Pelican has helped to transform the University’s supply chain function and provided a centralised system that now fully manages every aspect of the University’s catering needs.   The supplier tendering process consolidated the number of suppliers from 44 down to 22, creating many efficiencies and savings, however the positive impact it has had overall is extremely tangible as Nic endorses:

“A huge advantage for us is that now, with Pi we are able to pay all our suppliers – excluding our Costa Coffee and Starbucks franchise operations which are dealt with separately – via one simple monthly payment. We have essentially reduced the burden of manually processing 18,000 individual invoices a year, down to just 12 to Pelican, and they manage the payments to our supply chain. We have seen a significant reduction in administrative burdens and have been able to redeploy the team of six people into different areas of the business. We have seen a substantial saving in ‘people hours’.”

The University is also able to really get under the skin of the data behind its procurement process as Nic explains: “What Pi gives us is the detail by supplier, so now when we’re at supplier meetings, we have everything to hand on the products we have purchased and any price variants over the contract term - or how close we are to contract price. It makes our invoice control much sharper and we can quickly understand how suppliers are performing on their contracts.”

“It also gives us visibility on product trends; we can quickly see what’s selling well and this insight is great for our chefs.  There are 4,500 recipes now on our system and over 12,000 ingredients.   Having spent the time at the outset to build recipes in to Pi, it is now able to integrate with our EPOS system, and populate our till system with recipe costs, and as market prices or ingredients change, it automatically updates the till system.” 

The advantages don’t stop there, with Nic keen to explain how the online tool is also supporting them with providing clarity on a huge swathe of data. “At any time, I can access reports that assess activity by day of the week, weeks, months, by unit, outlet, by category, brands, products, recipes and more.  We can see the products being sold, determine trends and produce accurate costs behind it.   As we’re approaching Brexit, it gives us transparent evidence when a supplier adjusts pricing as a result of ‘market conditions’: with Pelican at my side, I’m in a better position to respond to the supplier to question any uplift and have their full support in these discussions.”

As a result of consolidation in suppliers and creation of automated processes and efficiencies, the University is anticipating both financial and resource savings.

“We’re currently showing an improvement in our margins, compared to last year, and I’m confident in being able to get an accurate position this year on our numbers,” confirms Nic.  “In fact, the University has been going through the implementation of a brand new accounting system and, so while this project is underway, I can get an accurate position on my numbers at any time through Pi, and so rely on Pelican to keep me on track, while the new accounting system is installed.”

Stock taking has also been transformed as a result of the centralised, digital approach through Pi. “Stock takes was one of the key areas we needed to transform. Previously it would have taken us around a week to complete; now, we get a full report by midday on Monday, following closure on Sunday. To get to the results that fast is a real achievement in my book. I can see variance of products at key line, it’s integrated with EPOS and I can see variances down to a single item.”

 

>>In Conclusion

There is no doubt that the University of Birmingham has witnessed significant advantages to its procurement transformation.  Utilising an online system to manage the supply chain, procurement and invoicing function is already delivering a number of improvements.

Concludes Nic: “My visibility of procurement is much stronger; the senior team in directorate get a clearer visibility on products, our supply chain and compliance, with more timely stock results that are coming through it means we are able to manage stock in a more conducive manner.” 

“It’s changed my understanding, learning and visibility of what’s out there across the entire organisation.   I think it’s fair to say that procurement can be seen as a bit of a ‘dark art’, with traditional systems difficult to navigate.   With Pelican, this is not the case.  Our team are fully on board and engaged and we are seeing greater efficiencies and improved activity.”  

“As far as I’m concerned, our partnership with Pelican has been incredibly helpful.  They’ve worked hand in hand with us to make this whole process a success, and with real heart I can confidently say we are in a much stronger position.”

 

Links:

University of Birmingham Catering & Hospitality 

Pelican Pi online procurement system

 

Other Case Studies from University Clients:

St Hugh’s College, University of Oxford: We transformed the way we manage our food procurement and achieved 14% savings 

Pelican proud to deliver 16% savings for Keble College, Oxford

 

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