How procurement at Flybe will power future growth

How procurement at Flybe will power future growth

Flybe has transformed its procurement operations to become the airline of choice. Director of Procurement & Finance Business Partnering Richard Young t...

Flying from more UK airports than any other regional airline, Flybe offers a customer-focused, cost-effective and time-saving advantage over its competitors. The company has undergone a significant transformation to become the airline of choice.

Recognising the growing importance of procurement across its operations, Director of Procurement & Finance Business Partnering, Richard Young has streamlined Flybe’s internal processes to become more seamless and deliver increased value to its customers.

Responsible for engagements relating to all commercial and contracting matters with external suppliers, Young has undertaken a thorough overhaul of Flybe’s direct and indirect spend, including its aircraft fleet acquisitions, disposal and financing activities.

Driving efficiencies

Young has spearheaded transformational change across the procurement department, helping to ensure its position as an increasingly pivotal participant in key strategic decisions made by the business. 

“We’ve undergone quite significant transformation, a part of which has been to centralise procurement. It's moved away from individual departments doing their own buying to a much more strategic function. We are now involved in all activities relating to supplier expenditure, be it IT or marketing, engineering or maintenance, becoming a business partner to all our internal stakeholders.

“We support all departments to improve security of supply and drive better value,” he continues. “We’ve also organised ourselves in a category management structure, where individual procurement team members are accountable for chosen areas of spend. Their specialist knowledge adds value that makes a more effective procurement experience for our business owners.”

As a result, Flybe has gained increased clarity across its procurement functions, enhanced its knowledge and capabilities and delivered significant cost reductions across the business.

“Technology has really been at the heart of these changes, and it’s been an enabler to help us improve delivery,” says Young.

Technological capabilities

The company’s three-year transformation has impacted all areas of the business. Throughout its ‘Back to Basics’ project, Flybe enhanced its back-office capabilities, focusing on three main areas – finance, HR and procurement functions.

“Driving out cost was only part of the motivation,” notes Young. “One of the key aims was also to improve governance and compliance and improve the general quality and availability of data that, in turn, would better support decision making.”

As such, the overhaul of Flybe’s centralised procurement systems has been a key part in contributing towards an improvement in sustainable business processes.

“In actioning these improvements, we conducted a comprehensive sourcing process involving a Request For Information (RFI) and a Request For Proposal (RFP), looking at both integrated enterprise resource planning solutions as well as best of breed systems with the added need for them to be integrated with one another,” explains Young.

“We elected to go down the last best of breed route as we felt that presented a better overall fit for our business.”

In the procurement area, investing in Wax Digital’s web3 source to pay (S2P) solution has enabled Flybe to gain meaningful cost savings, streamline sourcing and purchasing processes whilst establishing improved governance and controls relating to supplier engagement.

“We have also invested in Cleardata’s off site invoice processing solution to reduce on-premise invoice handling and also Sparefinder’s data tool to help standardise our non-aircraft materials and service master data.”

Additionally, Flybe has invested in new technology in its HR areas, procuring iTrent from Midland HR along with a new Finance platform utilising Sage’s X3 software.

Lastly, the decision to implement specialist airline aviation system AMOS (in the engineering maintenance arena) and Airpas to process direct operating cost transactions, will further enable operational efficiency. Young explains that as part of the ‘Back to Basics’ project, all new systems are being integrated through the use of data extraction technology from Talend.

“We're now at the benefits realisation stage,” he says. “The majority of the systems are now implemented. We selected solutions based on a number of factors including functional and cultural fit, vendor flexibility and cultural alignment with Flybe’s core values.”

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Enhanced value

The investment in technology and subsequent benefits has also transformed Flybe’s relationships with its suppliers.

“We have relationships with over 2,000 suppliers, many of which are, of necessity, strategically long term when relating to the supply of mission critical goods and services,” notes Young.

“For others, where there may be multiple supply options, we employ different sourcing strategies, testing the market more frequently when looking at commodity products like office supplies and IT hardware. 

“Being a publicly-listed company, it is critical that we adhere to agreed corporate governance and that the new technologies we have employed are paramount in achieving the overall compliance that is so necessary in managing and maintaining relationships with both new and existing suppliers,” he continues.

“This allows us to mitigate any potential credit risks on the supply side whilst at the same time making the overall source to pay cycle more operationally efficient.”

Customer focus

With the General Data Protection Regulations set to become enforced within Europe in May, how will this impact Flybe’s operations going forward?

“This is mission critical to our business and we are taking it very seriously,” observes Young. “To ensure compliance, we continue to invest in talented people and technology across all relevant areas of our business to ensure that we have covered off all foreseeable eventualities.

“We are also naturally monitoring Brexit developments closely,” he adds. “The most important thing for us is to receive clarity from the Government; however, we don’t fly point to point within mainland Europe, which means we are less exposed than others.

“Of course, no one really knows truly what the impacts are going to be, but nevertheless, because we do operate in Europe it is something that we are preparing for.”

Flybe would not be where it is today without the commitment of both its dedicated staff and loyal customer base.

“We are passionate about the regional communities we connect and serving them is at the very heart of our business. This is our purpose – our mission,” concludes Young.

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