The Monarch Group is a privately owned airline with a fleet of 35 aircraft operating from the UK to Europe and North America, comprising Monarch Airline, Monarch Engineering and The Travel Company (Cosmos and Archers) selling package holidays. The annualised Airline spend was c.£500m+ including inter-co.
There was a procurement presence within the Airline but with a limited scope and key spend areas were being managed by budget holders.
Following heavy trading losses the owners targeted ‘immediate’ operating cost reduction of £20m and revenue increases of £30m. A ‘Cost Task Force’ was established to locate and deliver the cost reduction activities across the Airline and ADR was hired to scope and manage delivery of the procurement work stream, targeting £4.5m delivery in 12 months (on addressable spend of £75m).
ADR used Monarch spend data to perform a high level Opportunity Analysis following interviews with key stakeholders and senior management, which the business bought into.
Following this ADR resourced and prioritised the savings delivery against an agreed wave plan detailing targeted delivery and implementation, engaging with the key stakeholders and managing the savings projects.
Weekly reporting together with stakeholder accountability for savings implementation ensured business buy-in.
ADR provided an interim HOP to manage the business as usual procurement activity with the objective of establishing and resourcing a procurement organisation and then converging the wave plan project activity into the procurement team to ensure continuity and build upon the momentum achieved.
Transport & Distribution
Diagnostic & Sourcing
Savings delivered and realised from the ADR work stream = £3.8m on addressable spend of £55m (6.9%). A new procurement function was established and a new HOP recruited with ADR’s support. The overall CTF goal was achieved and extended into year 2.