Qantas steps up procurement transformation

Qantas Group CPO Jane Harley says 2013 will be a "pivotal year" for the company’s procurement transformation

Qantas steps up procurement transformation
Qantas steps up procurement transformation

By Anna Game-Lopata | May 14, 2013

Qantas Group Chief Procurement Officer Jane Harley says 2013 will be a "pivotal year" for the company’s procurement transformation.

Appointed in September last yea, Harley is responsible for transforming the Qantas Group’s procurement function to "deliver sustainable value through best-in-class procurement practice".

She says the airline is well into its five-year transformation program, the first two years having set up strong governance and brought together a focused, talented team.

"This will be a pivotal year for procurement at Qantas and my priorities are to ensure strong relationships with stakeholders deliver real value, improve processes and build capability," Harley tells SupplyChain Review.

With a spend of $11.5 billion each year on goods and services, Harley says the Qantas procurement function is complex.

It touches all areas of the business including aircraft fleet – which is managed by a dedicated team
reporting directly to the Chief Financial Officer,
IT services, catering, marketing, ground handling and property, to name a few.

"The diversity of the products, markets and regulatory systems associated with these purchases means Qantas is potentially exposed to legal, financial, operational and commercial risks," Harley says.

"As more than 60 percent of our revenue is spent with suppliers, rigour in our procurement processes, practices and dealings with suppliers is essential for strong sustainable business results and relationships with our key suppliers.".

While Harley declines to speculate on what kind of individual projects she might initiate as part of Qantas’s procurement transformation effort, she says a big priority will be investing in people to build the airline’s procurement capability.

"There has been a significant change over the past decade in the value that organisations expect from their procurement teams," she says.

"Over the past five years and especially the last one to two years, there has been a dramatic increase in the relevance, durability and commercial rigour of contractual agreements.

"Many large organisations have shifted from a dependence on consultants to internal procurement teams focused on delivering short and long term value.

"These teams are incentivised to really understand their business and live with the consequences of their sourcing and the contracts that are struck.
This is driving much stringer business outcomes and us great to see."

At Qantas, Harley
says the focus is always on delivering the best commercial value for the airline’s shareholders, internal and other external stakeholders.

"We make it clear to our suppliers that they must share that goal and we strive to build close, constructive working relationships with them," she says.

"Aviation is a highly competitive, asset-intensive, low-margin industry," Harley adds.

"It’s vital we establish high quality relationships with suppliers to deliver value for our customers, control costs for the business and ensure that our uncompromising safety standards are upheld."

Read the full interview in the June issue of SupplyChain Review.

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