Tongaat Hulett is a large diversified agricultural and agri-processing business with integrated components of land management and property development. The sugar and starch operations produce a range of refined carbohydrate products. Operations span across 6 countries in Southern Africa.
ADR were selected by Tongaat Hulett to review their procurement operations across the group, develop options for improvement and support a transformation initiative. Our aim was to identify and implement procurement improvement opportunities in the business, enhance skills of all who buy and obtain cost and value improvements.
A current state and opportunity analysis, focusing on the key enablers of procurement, was undertaken by ADR to identify improvement opportunities and direct the development of a change programme.
Procurement in Tongaat Hulett was decentralised at each of the operations resulting in an unstructured approach to leveraging synergies, accountability for procurement improvements were not defined, procurement focus was transactional, collaboration attempts met with little success and the procurement functions in most of the operations were viewed as a hindrance to business success.
The current state analysis identified a range of improvement opportunities options across all 6 key enablers with a significant ROI from potential cost and value improvements.
The resulting change programme focussed on improving stakeholder engagement, raising the profile of procurement in the business, measurement and reporting, implementing robust cost and value management processes, developing common ways of working in procurement across all operations, skills enhancement of all who buy, automating transactional processes and development of category source plans.
Diagnostic & Advisory
To improve procurement competence, engage stakeholders and deliver sustainable business benefits.
The initial cost improvement target of 4.6% of influencable spend over 2 years was achieved within 12 months of the launch of the change programme.