In this Acceleration Case Study, learn how Mitchells & Butlers, one of the largest bar and restaurant operators, transformed its supply chain. Since they contract most of their suppliers, there was a great need for better management of these procedures. The company identified three core areas – people, procedures, and systems – to address. Learn how Medius Spend Management helped Mitchells & Butlers to improve efficiency, maintain control, and decrease risks across the supply chain.
Business Challenge – Improving the Supply Chain
Mitchells & Butlers is one of the biggest operators of bars and restaurants throughout the UK. They offer a wide variety of foods and drinks in over 1,700 locations. The company spends roughly $1.3 billion with suppliers every year. Three specialist procurement teams manage food, drinks, and indirect costs.
They contract the vast majority of suppliers. There were offline procedures in place that required a substantial amount of management. The auditing process also needed a lot of time to maintain. One of the main goals at Mitchells & Butlers is to continually improve three core areas: people, procedures, and systems.
The company decided to partner with Medius Spend Management. Across the supply chain, they wanted to improve efficiency and maintain control as well as decrease risks. Working with Medius made it possible to configure a core platform that best matched their specific needs. They created the system in-house, under the name of “GO!procure”.
Software Solution – Medius Spend Management
The Mitchells & Butlers team began working on a process to transition their paper-based contracts storage to a centralized online database. For this, they used Medius Contract Management. They also needed to develop a reporting suite focusing on contract compliance. The Medius Project Management team worked closely with them throughout the design phase. During the design phase, they created an efficient delivery process of the solution. Meanwhile, they also worked on improving the approach to the supplier onboarding process. The team at Medius spent much time working with the central procurement team. They offer a consultancy role to provide support for the delivery of the project.
Relationship Management Creates Positive Change
Mitchells & Butlers focused on creating a tiered structure to segment their suppliers to help further improve relations and engagement. Introducing various suppliers’ initiatives would help in multiple ways. It would create a framework for frequent engagement with key partners. Additionally, it would enhance supply-chain relations, build trust, and increase innovation throughout the supply chain. Using a simple system was critical to success during the transition from paper contracts to a more intuitive approach through Medius.
Quicker On-Boarding and Sourcing Process
Using a paper-based process for managing each division often resulted in weeks for sourcing and setting up new suppliers. Due to a lack of an audit trail, managing these processes also became more challenging to comply with. Setting up new suppliers also required a lot of work. It usually took 3-4 weeks. Suppliers had to fill out a Word document that included all of their details. They had to return it through the mail. Eventually, the Mitchells & Butlers stakeholders would have to approve it. Afterward, the procurement team would manually enter all of the supplier information into the payment system. Any future changes to the supplier record also had to occur manually.
Accelerated Onboarding Process for Suppliers
One of the most significant drawbacks of the supplier onboarding process is that most information was located in separate drives. This made it impossible to gain a central view of supplies. This inefficient process also made it challenging to identify which suppliers already had approval and met Mitchells & Butler’s compliance standards. Using the Medius Supplier Information Management (SIM) reduced the onboarding process to only a few hours. The system is also highly configurable and simple to use, which further improves the onboarding process.
Greater Control of Approvals for Suppliers
The team at Mitchells & Butlers needed to encourage the use of the Medius solution across the entire company. This would ensure each division retained control of selecting and approving suppliers while still maintaining involvement with the procurement function. Now, approved users can send out Supplier Registration Forms (SRF) to each supplier. Meanwhile, they can also capture and evaluate each response before being supported by the heads of each department.
Senior management can access Medius SIM to view approved suppliers throughout the company quickly. Some of these users can create contracts, depending on their permission settings. One of the advantages of the SRF is that it’s centrally located against the supplier record. All of this information is visible, such as health and safety policies, finances, and insurance certificates.
Enhanced Supplier Visibility
Medius Spend Management enables the team at Mitchells & Butlers to create a master supplier database. This is for improving visibility, gaining control, and saving time to handle other tasks. Using this software also minimizes risk and inefficiency throughout its business locations. Access to a dynamic SRF and an automated approval process has dramatically reduced supply-side risk. Stakeholders can now gain complete visibility throughout the entire supply chain.
Maintaining a Compliant Supplier Base
An essential requirement at Mitchells & Butlers is to maintain compliance. This is done by keeping up-to-date information for suppliers to provide an audit trail. Medius Supplier Information Management offers tracking capabilities with various features. For instance, this includes automated alerts and reminders if supplier documentation is nearing expiration. This puts the responsibility on suppliers to provide accurate information ahead of deadlines. These rigid controls involving information for suppliers allow for quick collection of this data. This information is stored within the system, making it easy for procurement to flag any suppliers that are not compliant with company policies.
The Results
Mitchell & Butlers has more than 3,000 compliant suppliers throughout its company. On average, they onboard 20-30 suppliers each month via Medius. The supplier onboarding process is much more efficient. Now, it only takes a few hours instead of 3-4 weeks. Additional benefits include reducing supply-chain risk and improving relations with suppliers. The Medius system reporting capability was essential for the procurement team to highlight the significant savings offered by this technology. Mitchells & Butlers can quickly extract complex data, as Medius uses Microsoft SQL.
Eventually, in 2014, Orchid group acquired Mitchells & Butlers. It resulted in many new suppliers. However, the Medius SIM system was able to quickly onboard these suppliers in only a few weeks. Using Medius for procurement enabled Mitchells & Butlers to obtain its expenses. This is critical in monitoring changes to costs with suppliers while also comparing these numbers with contract values.
Another benefit of using this system is that it allows suppliers to access the Medius Supplier Information Management. Suppliers need this access for uploading their insurance documents and any other details that would have previously been managed offline. This process is now a requirement for any supplier working with Mitchells & Butlers.
Medius also offers a secure cloud-based platform. It’s used by hundreds of different users throughout the business and each of its suppliers. It helps to enhance visibility and compliance. Following these key practices for procurement resulted in over 1,155 contracts stored within Medius Contract Management. This includes all of the suppliers that have already been onboarded, approved, and agreed to terms. Now, 1,300 users are fully proficient in using the Medius solution. It offers complete visibility of the entire supply chain and contracts. Ultimately, choosing to work with Medius Spend Management was an excellent choice by Mitchells & Butlers that offered a wide range of benefits.
