Award-Winning Procurement Transformation Programme

We are extremely proud to have won two awards in two months at two different ceremonies, this is true testament to the value delivered by the joint project team.

Background & Challenge

After a challenging year where the Covid-19 pandemic impacted activities and financials, our client launched an ambitious strategic initiative focused on becoming more efficient, concentrating on growth and delivering sustainable value for consumers and doctors.

The pandemic exposed an over-reliance on a ‘single’ income source. All elective activity (e.g. joint replacements, cataracts), the primary income source, was halted overnight, but a high fixed cost base remained. As a response, Curzon Consulting was engaged to design and deliver a Procurement Transformation Programme.

Our Client

Ramsay Health Care UK is one of the leading independent healthcare providers in England.

Ramsay Health Care UK provide a wide and comprehensive range of specialised clinical services from routine to complex surgery, day case procedures, diagnostic services and physiotherapy

Ramsay Health Care is well-respected in the healthcare industry for operating quality private hospitals and for its excellent record in hospital management and patient care

  • 40 hospitals and facilities located across England
  • Over 200,000 patients receive treatment each year in Ramsay Heath Care
  • Over 7,600 staff employed at Ramsay Health Care UK
  • Over 3,000 Consultants work in partnership with Ramsay Health Care

Overall Approach

Over nine months, we took a pragmatic, agile and “together” approach to accelerate benefit delivery, particularly in high spend / high complex clinical spend categories

  1. Conducted a full review and defined a new procurement organisation aimed at maximising value to the business
  2. Conducted a review of the external spending and identified cost savings opportunities within complex medical categories
  3. Implemented a full strategic programme that delivered multi-million £ cost savings to the business

Our Solution

1 FULL PROCUREMENT ORGANISATION REVIEW

We assessed the existing procurement organisation against eight dimensions and highlighted several data-driven insights

  • Quantitatively and qualitatively assessed the procurement team, conducted time analysis, salary benchmark & reviewed performance
  • Business partnering and perceived value: Interviewed key business stakeholders across all divisions
  • Assessed procurement influence across all spending areas
  • Defined and costed new (to-be) procurement organisation

Our Results

  • A complete procurement maturity assessment highlighting strengths and weaknesses of the current procurement organisation
  • A new procurement organisation was designed, profiled and costed.
  • A procurement organisation designed to maximise value to the business and stakeholders

2 FULL EXTERNAL EXPENDITURE OPPORTUNITY ASSESSMENT

We conducted a full opportunity assessment on Ramsay’s external expenditure to define adequate sourcing strategies and identify cost savings opportunities

    • Cleansed, categorised and analysed spend data; Providing full spend transparency.
    • Conducted category deep dive for each key medical category, assessed current category management and supplier management
    • Defined adequate sourcing strategy, identified opportunities and sourcing levers
    • Identified and quantified savings potential via internal and external benchmarking

Our Results

  • Category strategy for all key medical categories
  • Multi-million cost saving opportunities identified
  • Prioritised sourcing plan with saving targets by spend categories
  • High level 3-year business plan

3 THE IMPLEMENTATION

We implemented procurement transformation and a cost reduction program

  • Our methodology was specifically adapted to address demand-side cost optimisation levers. Whilst we addressed a range of spend categories and redesigned the PO, we delivered sizeable benefits in difficult clinical areas such as Orthopaedics.
  • A key benefit in orthopaedics came from ensuring the surgeon selected the appropriate implant system (metal or ceramic) to match the patient’s profile (e.g. age, gender).
  • Our analysis showed surgeons implanted costly ceramic hip systems in a high percentage of older NHS patients. With fixed NHS reimbursement every incremental switch impacted the bottom line.
  • Our insights directly influenced the Orthopaedic Steering Group’s new policy which required surgeons to utilise lower-cost metal hip systems in older NHS patients.
  • Fundamentally, a key part of the relationship was to ensure recommendations on cost improvements would not compromise clinical outcomes and patient satisfaction.

Our Results

  • Delivered £multi-millions in incremental savings and a new procurement organisation
  • Engaged with all key medical stakeholders and instilled a cost-consciousness culture
  • Ramsay Health Care UK will benefit from the savings over multiple years

“Curzon helped us obtain the confidence and operational ‘can-do’ to drive incremental savings sooner than we could have expected, and then to push on to best practice performance. ​

Their skill was in balancing pace of change and the results imperative with the need to take the organisation with them on the journey.  ​

A key achievement was building the necessary collaboration between the many functions that needed to act together to drive benefits in complex clinical spend categories. ​

Curzon’s strong analytical expertise, and ability help us to take a critical view on the “art of the possible” and bring the team along on the journey to demonstrate benefits delivery was a critical success factor.​

The result was a tangible and ongoing commercial win, and a new Procurement Organisation to drive cost leadership, profitability and sustainability going forward”​

Peter Allen
Chief Financial Officer
Ramsay Health Care UK

Contact our Procurement service line lead,Stephane Boroncelli, to find out more

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Framing the requirements for developing a customer-centric approach and service model

The issue

  • With a re-focusing of the organization on energy transition and a strategic objective to grow B2C Mobility and Convenience revenue streams, the current, largely B2B, customer care service model was increasingly being asked to meet needs beyond core capabilities and capacity, putting a strain on service and cost to serve
  • With limitations on internal capability, business units have chosen to outsource services, leading to a proliferation of suppliers, models and customer experiences
  • No cohesive corporate narrative of the customer promise exists and the internal focus was on fixing service failings to reduce the noise within the organisation
  • The need for a future-proof operating model that is aligned to the projected steep growth in the B2C customer base was recognized
  • Gaining an appreciation of leading external practices in customer care delivery was considered an essential input to framing the right future state operating model 

Solution

  • Current state assessment of customer care and customer centricity capabilities against a set of standard dimensions to establish current maturity and points of commonality or difference across business groups
  • Established current state maturity of each business against an industry reference benchmark  
  • Developed design criteria to frame a future operating model and as a reference against which to benchmark external leading practices
  • Undertook competitor and cross-sector benchmarking to identify areas of Customer Care differentiation, including desktop research, expert input and interviews with Customer leaders within major organisations (both B2B and B2C).
  • Defined the priority levers to drive improved customer-centricity and articulated the linkages between the dimensions 
  • Developed an initial roadmap to outline how the Customer Care capability should evolve

The results

  • Mobilised the senior stakeholders to want to move beyond fixing performance failings in Customer Care to evolving a business-wide Customer-centric operating model
  • Delivered a customer centric maturity assessment across three representative businesses against a series of capability levers
  • Multi-industry, international benchmarking exercise, highlighting customer-centricity maturity and leading practices
  • Identification of priority levers to increase customer centricity maturity and approach options to achieve a viable system model
  • Development of a roadmap to move beyond operational fixes to a strategically customer centric approach 

Curzon consulting mca finalist 2019

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Digital CX Routemap

Designing and deciding digital CX route-map & the priority omnichannel service investment to realise it

The issue

  • Having delivered the ‘brilliant basics’ part of a CX transformation programme, the bank needed to define a digital CX design to deliver a signature, differentiating experience 

  • A pressure point was that customers’ expectations of doing their banking anywhere/ anytime/on any device were growing, and the ground had been lost on this to digital challenger banks

  • The bank was also in sharp cost control mode so it was critical that digital CX investment choices were well evidenced, validated and focussed 

  • We had to answer the question: where and how to prioritise omnichannel service investment to deliver a competitive digital CX?

  • With many competing candidates for digitising customer service across the existing product portfolio, we had to be clear about what omnichannel improvements would realise greatest value from a CX and commercial perspective

What we did

  • Reviewed draft digital strategy and developed investment prioritisation criteria to focus CX and omnichannel service design choices

  • Defined design principles to guide the development of Omnichannel capability

  • Competitor and cross-sector benchmarking to identify key areas of digital CX differentiation

  • Evaluated and ranked CX/service design options against agreed prioritisation criteria and ability to leverage existing IT capability and technology roadmap

  • Flesh-out of to-be CX/service design with benefit cases supporting the investment priorities identified

  • Produced and validated a sequenced digital CX/omnichannel implementation route map

The results

  • Delivered new digital CX/omnichannel design with 10 key touchpoint changes, each with benefits ranging from £3.5M to £9M annually in a fully realised state

  • Pragmatic, phased change route map adopted, which drove early cost savings and new customer acquisition uplift by addressing highest priority CX pain points, allowing subsidisation of next phases

  • 80% of the technology capabilities required to deliver the route map were covered by leverage of existing or planned future (and already budgeted) technology assets and upgrades

Curzon consulting mca finalist 2019

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Delivering business turnaround

The issue

  • The UK business of a global construction materials manufacturer had been losing money for several years due to inefficient operations and declining sales in an industry sector experiencing extremely challenging times.
  • A full business review and improvement plan were required to stabilise the business and address the financial performance.
  • Significant cost reduction efforts had already been made to offset the declining sales and lower margins, but the business was continuing to lose money.
  • Sales lacked the basic tools and capabilities to compete effectively and operations were poorly managed resulting in over-production, an inefficient organisation and poor working practices.
  • The leadership team was highly dysfunctional and lacked the capability to define and execute a plan to address the situation.

Solution

  • Undertook a full situational analysis of the business operations and identified changes required to reverse the performance trend
  • A comprehensive change programme was designed and implemented with the full involvement of the business management team
  • Recognising that the current actions were primarily to address the initial objective of eliminating the business losses, a parallel stream of work focused on the market and development of the future strategy for the business
  • This dovetailed with the reorganisation of the commercial functions and outlined the business’s future journey to go beyond a break-even situation and achieve acceptable returns

The results

  • The programme had a significant impact on the business across all areas of the value chain and delivered a sustainable bottom-line improvement of over £5m p.a in 12 months.
  • In addition to the delivered cost optimisation actions the re-focusing and capability development work with the sales team secured a contract renewal with three principal customers and the acquisition of a new major account and stemmed the loss of any further business.
  • The new ways of working that focus on using sound management information to run the business and to action issues have taken root across the organisation. Decision making improved and continuous improvement is becoming established.
  • The Group Executive sees the step change in performance that was achieved in the timeframe as the most successful intervention of its kind across the portfolio in recent years.

An award-winning team

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Applying lean principles to a deliver a step change in performance in a construction environment

The issue

  • Over a year behind plan due to technical difficulties and the inability to establish an effective delivery model
  • Significant efforts were made to find a workable engineering solution but continuing to fail in meeting planned delivery cycle times
  • Accruing significant non-recoverable costs on extending leases of expensive marine engineering plant
  • Accepted reality that most delays were either due to weather or one-off events and therefore non-addressable
  • Reliant on experienced agents, managers and foremen to manage communication without the need for much structure or formality
  • The aim was to achieve a repeatable 14-day ‘production’ cycle, from a starting point of 19 days as the demonstrated best achievement

Solution

Working with the project team to identify and implement:

  • An optimal production process with defined task times against which the project could plan, execute and measure performance
  • Introduction of cross-functional short-range planning discipline to improve visibility and reduce the instances of unplanned stoppages through poor communication and lack of coordination
  • Strengthening the cascade communications to the front-line teams to ensure the right plan was being executed
  • Prioritisation of the process improvement pipeline to accelerate the implementation of the highest impact solutions
  • Establishing adherence to a standard process and course-correcting back to the agreed sequence if unplanned events caused the deviation
  • Previously each cycle had effectively been ‘bespoke’
  • Using close monitoring to highlight avoidable downtime and to identify operational fixes, e.g deck layout standardisation

The results

  • Cycle time was compressed to less than the on-target 14-day sequence on a sustained basis, and as low as 10 days, with associated cost savings of ~£0.5m per cycle.

Having the Curzon team ‘embedded’ within the project proved effective in understanding the complexities and challenges of the operating environment. Pragmatic and tailored interventions and a ‘test and learn’ approach encouraged adoption and ownership.

An award-winning team

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Business performance turnaround for a multi-country division of a global building products group

The issue

  • LATAM division of a €3bn global construction product manufacturing & distribution group
  • Country-based business units in 14 geographies from Mexico to Chile with 3,500 staff generating revenues of €400m
  • A sustained period of under-performance with operating margins at sub-3% making it the worst-performing division in the Group
  • Divisional layer not adding any value with local businesses being left to operate independently, some with more success than others
  • An extended analytical diagnostic by a global consulting firm had established the scale of the problem, but no credible and accepted plan to address the issues had emerged
  • The need was for pragmatic help to make change happen with the full buy-in of local management

Solution

Plan and mobilise stage

  • Confirm the scale of the improvement opportunity
  • Agree targets and align with budgets to have one set of numbers
  • Create a plan and a governance model to balance top-down coordination with full engagement from the business units

Delivery stage

  • Initial focus on four of the largest markets where impact potential was greatest
  • Reduction in margin leakage through pricing optimisation, product mix & discount control
  • Introduction of operational excellence basics across manufacturing facilities
  • Inventory optimisation, including clean-up of obsolete and slow-movers
  • Reduction of corporate overhead layer and leverage of shared service centre to reduce in-country costs
  • Capability development of management and teams across all disciplines

The results

  • The Division was transformed from worst to best performer in the Group within 12 months
  • Operating margin tripled and accrued benefits delivered were 45% above the programme target
  • Working capital was reduced by €25m
  • The change management effort involved over 1,000 staff across all functions and businesses
  • Awarded ‘Best International Project’ by the UK Management Consultancies Association
  • Curzon entered a risk-reward commercial arrangement on benefits delivered

We wanted a step change in performance, done in a way that would build capability to make it sustainable… the results speak for themselves.  – Divisional CEO

An award-winning team

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Lean value chain analysis and design for global precision engineering products leader in aerospace industry

The issue

  • A complex multi-stage casting, machining and coating operation manufacturing precision components for the aerospace industry
  • Underperforming organisation and low levels of ownership for improvement
  • Extremely low velocity through the process, with poor yields and excessive scrap
  • High inventories of work in progress and finished goods
  • Production measures encouraging over-production
  • Silo mentality in operations exacerbating the WIP situation
  • Disaffected workforce with little interest in driving continuous improvement and no effective performance management in place

Solution

  • Analyse the current situation to articulate the operational improvement potential (yield uplift and inventory reduction)
  • Create the business case for change (P&L and cash impact)
  • Design a pilot to create an integrated supply chain for the largest volume product including suppliers and JV partners
  • Detail design of a pull model and elimination of WIP stages along the entire supply chain
  • Re-design of the layout and organisation to separate ‘dirty’ and ‘clean’ operations to reduce rework
  • Launch of a continuous improvement approach within the shop floor to tackle scrap, rework and productivity issues
  • Design and introduction of a cascaded performance management framework

The results

  • 40% reduction in inventory identified through WIP elimination
  • The feasibility of a 50% reduction in production lead time confirmed
  • 10 percentage-point improvement in yield performance from closer process control
  • Plan to deliver £5m savings in-year agreed
  • Changes to ways of working implemented in pilot cells with Lean work-flow approach trialled
  • Programme of Lean training and continuous improvement projects implemented
  • New KPIs are being used to drive the performance of the value chain in place of traditional cost absorption metrics

An award-winning team

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HR organisation

Building organisational capability to drive rapid performance improvement

The issue

  • Curzon Consulting were initially engaged to define the programme efficiencies of a public body with a target of £302m for the current investment period
  • Alignment of financial targets and scope at scheme level enabled us to provide assurance that the programme will succeed
  • It also revealed that there were some critical underlying issues around people and processes that needed practical solutions
  • Project configuration and change control were not historically managed well across the programme; project baselines were not agreed/recognised, and redesign often occurred
  • There was an embedded Process Compliance culture. People were more concerned on outputs and checklist completion than project outcomes and performance
  • There was inconsistency in capabilities and performance among the PM community. Projects seemed to follow contractor’s agenda rather than the client’s
  • Project and programme performance was poor and in general all projects were over budget and running behind schedule, costing millions to the Programme

What we did

  • Assessment of the management capability to implement change and mobilise the workforce
  • Analysis and prioritisation of the project management capability gaps for current and future operating model
  • Project lifecycle process mapping to understand gaps, levers and weak points
  • Communication of spend profiles to focus on project high cost and critical path activities
  • Reinforcement of the role of the PM in the operating model and the support available from specialist functions
  • Development of an on-the-job training approach to deliver immediate results and simultaneously start to address the capability challenges for long term results
  • Focus on people behaviours around process adherence and promote and install an intense focus on project performance to achieve the Programme’s objectives
  • Set performance indicators that were aligned towards outcomes, rather than outputs, to bring performance visibility

HR organisation

The results

  • Established a holistic view for an integrated project configuration and control framework. Programme has visibility on project progress and Project Manager development
  • Increased alignment to project configuration and adherence to the baseline
  • Created and installed a clear set of impactful project cost, schedule and risk related metrics. These are now being used for project performance management
  • Improved forecast stability and reduced risk exposure

Curzon consulting mca finalist 2019

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Operating model refinement and commercial focus to deliver a step change in business performance

The issue

  • A subsidiary of a global defence company, providing technology-based R&D solutions and advisory services to government and defence organisations and private sector companies at the cutting edge of secure communications and cyber warfare
  • Despite repeated calls by Group to improve, the business continuously failed to meet performance expectations on revenue growth, profit margin and free cash flow
  • The business was suffering from an overly-layered and siloed organisation structure, with burdensome management processes and lacking commercial focus
  • The underlying issues were structural and an absence of effective performance management, wrongly being justified because business discipline would stifle creativity and innovation

Solution

  • Undertook a business-wide design and business case development stage to anchor the current performance failings and the required changes
  • Implemented over a 12-month period working alongside the business unit leadership with a structured plan;
    • A new leadership team established, with stronger governance processes,  metrics, and proactive staff engagement
    • Simplified the operating model and aligned capabilities to market needs
    • Re-framed value propositions and initiated the move into critical national infrastructure
    • Implemented resource management to drive productivity uplift
    • Implemented new mentoring and HR processes to underpin talent management
  • Supported post-implementation by refreshing the plan

The results

  • 29% revenue uplift (versus budget target)
  • 18% Return on Sales achieved versus a 15% target for the financial year
  • 90% improvement in business cash flow
  • 10% points increase in Engineer productivity, with a continued increase to 74% utilisation in year 2, and climbing
  • Transformed the operating model and business culture to be customer and commercially focused
    • Established performance management at the business and individual level
    • Underpinned changes with disciplines, governance, reward structures and visibility
  • The Project won the Management Consultancy Association’s award for “Performance Improvement in the Private Sector” with full sponsorship of the client

An award-winning team

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