Strategic sourcing buys the best for MillerCoors
Managing with consistency is brewer's approach to sourcing travel services.
By Susan Avery -- Purchasing, 2/12/2009 7:00:00 AM
Purchasing should be involved in the travel buy because it has processes in place that provide an all encompassing view of the company's spending, says Pam McTeer, strategic sourcing manager at MillerCoors. Travel is one spend she manages along with other corporate services categories such as office equipment and supplies and fleet management.
McTeer, who has 32 years of travel industry experience, says that some travel managers may have a one-dimensional view of purchasing, and see the function as being just about reducing costs and not providing employees with a service. While managing costs is important, there is more to purchasing than that, she says.
"We have to make sure we buy the best of what we need to buy. Travel is a large spend, and we have to make sure we have a program in place that meets our business needs and that our travelers feel good about." MillerCoors has about 6,000 employees who travel.
McTeer joined the strategic sourcing organization at Coors five years ago. Since then, the company has merged with Molson and later combined its U.S. and Puerto Rico operations with those of Miller in July 2008. Recently, McTeer, who reports to the director of indirect sourcing, has been working to consolidate the travel programs of both companies.
"Managing with consistency" is her approach to sourcing travel. Coors and Miller each had its own supplier base and that includes agreements with two different travel management companies (TMC) that McTeer manages. Also atop her mind: a new headquarters location in Chicago, which she says, "means anticipating those needs and mapping the right suppliers to support that."
How they buy. To ensure that it buys the best, the strategic sourcing operation at MillerCoors uses a standard seven-step strategic sourcing process to purchase goods and services including travel.
When selecting a provider of travel services, flexibility is one of the more important criteria for McTeer, as MillerCoors does not have a mandated travel policy.
Compliance to travel policy and preferred suppliers, as travel buyers well know, is key to keeping travel costs under control.
As she sees it, "suppliers have to be open to the culture of their customers' companies, and a mandate may not be part of that. So, I ask suppliers to come up with solutions that my internal customers will want to use that are going to be cost effective." This, she says, doesn't mean heeding a supplier's request to add a mandate to policy that travelers must use the supplier as a way to manage costs.
McTeer works closely with the finance operation on developing and managing travel policy. As part of the policy, employees must use the company's online booking tool and designated TMC.
She measures performance of travel suppliers using a scorecard that tracks quarterly progress toward meeting cost, quality, service and other objectives.
Particularly challenging with a policy that doesn't mandate is controlling rising costs of airfare (including all the new fees) and hotel room rates. A solution is to better manage demand for travel services and traveler behavior.
To measure performance to cost objectives for a TMC, for example, McTeer looks at metrics that track compliance to travel policy that suggests the traveler select an airline that provides lowest logical airfare (within two hours of planned departure or arrival times). As another example, the policy suggests the traveler use a preferred supplier unless there is an alternative supplier that provides the service for 20% less cost.
Each quarter, McTeer shares these metrics with top managers of the company's businesses. "It has a huge impact on driving compliance and helping to manage costs," she says.
Another way to encourage compliance with policy is through positive reinforcement, such as letting employees pocket some savings when they opt to travel coach rather than business class on international flights, she says. "I think we have to balance measures that save money with employee satisfaction."
As part of her responsibilities, McTeer also provides sourcing service and support to the company's meetings and events organization.
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