“The Supply Chain team is no longer just a function but a Centre of Excellence”: Procurement Trailblazers Q&A with Derren Chamberlain

Derren Chamberlain, Director of Supply Chain Operations at FirstPort, on the evolution of procurement, implementing digital systems, failing fast and why start-ups are the route to growth.

In our next Q&A of the series, we talk with Derren Chamberlain, Director of Supply Chain Operations at FirstPort. TL;DR? Scroll to the bottom.

You joined FirstPort in January 2021 (in the middle of a global pandemic no less!) having previously been the Chief Procurement Officer at ISS. How has that journey been and what are you looking forward to?

It’s been quite a whirlwind! I had some great opportunities at ISS. Whether it was supporting bids, strategically improving the business, introducing initiatives like Dragons Den, through to winning the prestigious CEO Team of the Year award, it was all a real privilege.

Then I was contacted by FirstPort who connected me with the COO, David Young. He liked my style and valued my experience; in return I knew I could learn from him. When I met the CEO and investors who shared their vision and plans with me, I was hooked.

Over my career, I’ve worked for some big companies like IBM, BAT and BAE Systems, and now I’m working for a medium-sized company with about 4,000 employees. While it may be a smaller operation, it is leading in its industry, and I love its agility. FirstPort is the UK’s leading residential property service provider and is continually striving to do better for its customers and to improve the industry as a whole. I’ve joined at a really exciting time as we’re in the process of rolling out a bold new customer-focused digital programme. This puts service excellence and our customers at the heart of everything. We’re upgrading and integrating all our systems and information into one platform using best-in-class digital products, so that we can connect, inform and simplify our ways of working to deliver great experiences for our colleagues, contractors, clients and customers.

This is a new industry in procurement for you. How have you harnessed your experience to understand and set priorities?

From a procurement perspective, my style has always been very collaborative. I’ve come in with over 25 years’ experience, and while I don’t have all of the answers, I’ve been part of some great solutions, and have been proud to assemble some great teams. But it doesn’t naturally always read across into a new industry and so I needed to get under the skin of the organisation. I needed to listen and be patient. I’ve tried to get around the business the best I can virtually and spoken to stakeholders at all levels, as well as to suppliers and customers. I’ve listened to all of this feedback and continued to distil that down until I’m clear about the key areas I need to prioritise.

You mentioned significant investment on the digital roadmap, which will be the “uberization” of your industry. It must be really exciting to be given the mandate to do big things. From a procurement perspective, what are your top priority goals?

It’s really exciting to be part of FirstPort’s digital transformation programme. We have a huge opportunity to deliver industry leading change with these new systems, and procurement plays an important part in that. We have a close relationship with our clients and customers, reporting back regularly on how their money has been spent at the properties in our care. For our customers, we’re looking after their homes and they’re paying for that service, so it’s more important than ever that we’re transparent and accountable.

Instead of starting with too many plates spinning, I’ve been careful to distil the priorities for procurement down into three areas that we’ll focus on in a three-year plan. This is underpinned by other tenets, but having three key areas makes sure we stay focussed:

1 | Demonstrating value for money

The industry model is that the external spend is not our money, it’s our customers’ money held in dedicated bank accounts for each development. So you can start to drive things like category management, aggregating and consolidating spend, rationalising your supply chains — all the classic things that you’d naturally do — but recognising that you have a lot of stakeholders, and it needs to be a careful balance with understanding customer needs at a local level. Our customers care about how their home is managed, and how service charges are spent, and rightly so.

I want to demonstrate the benefits of a professional buying team, showing customers the value of our fully vetted, pre-qualified supply chain with benchmarked rates, and high levels of service that we can evidence. And to help them make the most informed choice when it comes to supplier selection. Our scale and established relationships with suppliers also means we get exclusivity, competitive rates and can demonstrate things like sustainability and supply chain diversity. It’s almost that Groupon mentality where you take a leap of faith: if you embrace this, cost is reduced for all, without deterioration of quality or service.

The other part is demonstrating the value of the management fee our customers pay as part of their annual service charges. We currently manage 290,000 homes (everything from apartment blocks, luxury penthouses and retirement communities) and we’re responsible for making sure that their building and common areas are looked after to a high standard — operational lifts and lighting, ground maintenance, clean carpets, painted walls. We do a lot for that fee, but you have to remember that for our customers we’re often providing an almost invisible service that unfortunately most people only notice when things go wrong. I’ve lived in serviced apartments, so I know how easy it is to take all that for granted and question where your money is being spent. We need to be accountable and demonstrate value for money for our customers.

2 | Managing risk and safeguarding the reputation of our brand, our investors and our customers

It’s vital we continue to ensure our supply chain is competent, qualified, and financially stable. That doesn’t mean only prioritising large suppliers — we collaborate with small enterprises and start-ups too. But what I need is people that want to work with us on the transformation journey we’re going on, and want to improve too. I’ve inherited a large number of suppliers comparative to the annual spend, but this is not about rationalisation, it’s about right-sizing — evaluating what’s appropriate for our business and ensuring we’ve always got a safe, accredited supply chain that offers value for money.

3 | Providing excellent on-site service

FirstPort’s property and development managers, concierges and other on-site colleagues work at the developments in our care to support their customers, but they’re also supported by specialist contractors to provide specialist outsourced services. I want to make sure we always know that every time our suppliers come to one of our properties, they’re operating safely, there’s a quality check and more importantly, the service they provide is brilliant every single time because at the end of the day they represent our organisation. So the focus here is on supplier relationship management, performance management, and demonstrating that we’ve got the right T&Cs in place to manage and govern the relationship for best value for our customers.

You’ve mentioned in the past that procurement is a “dynamic environment that must move with the needs of the customer”. That has been made all too clear by the impact of COVID-19 on customer demands and supply chains. How has FirstPort been dealing with those issues?

Every single organisation has been impacted to varying degrees. You look at hospitality and it’s been devastating, but for other industries it’s actually given them a boost. FirstPort is not immune to those issues but the nature of the industry means it has been resilient. As a lot of our work is essential to the safety of a building or making sure that the building is cleaned regularly (even more essential during COVID), service provision largely continued during the pandemic. Our site-based staff remained working at their developments throughout, whether it’s about lifts, cleaning or managing bin stores and parcel rooms on site.

One of the things I’ve always been really open to is disruptive technology that helps navigate these environmental challenges. At ISS, it was bringing in new tech that supported social distancing (for example, having a system that detects how occupied certain spaces are, like toilets, and therefore whether they’re safe to enter). I haven’t yet got into that level of detail at FirstPort but it’s on my radar.

That sort of innovation often comes from start-ups and smaller suppliers and can really help drive business growth. One of the things we’ll be doing in due course is running a number of engagement sessions with some of our more mature suppliers (because I’m sure they’ve got some great tech) but also talking to smaller players who may not be part of our current supply chain but perhaps should be. These interactions allow us to continually evolve and provide a better service for our customers and clients.

What were the biggest leaps you made in terms of digital transformation at ISS, and where do you hope to drive transformation at FirstPort?

There was a huge opportunity at ISS around the implementation of a new ERP system. I knew from experience that most ERP systems, while they can do a lot of things, tend not to be so good at P2P and are often clunky. What people want is a slick way of driving efficiencies with a system that’s so intuitive it doesn’t need an instruction manual and makes everyone’s lives easier. I had to create a strong case to convince stakeholders of the need for a new P2P system that would build on what the new ERP offered.

We ended up implementing Coupa, which underpinned the success of the roll-out of that ERP system. It brought us closer to our suppliers, created better actionable management information, and drove efficiencies to become a really powerful tool for ISS. The UK team also piloted a supplier assurance partnership with Achilles to mitigate risk related to ongoing supplier management, giving us actionable insight and an audit trail. Essentially, both Coupa and Achilles link back to that digital-first, big data story that creates valuable insight to drive aggregate improvement and/or reduce risk.

To justify all of that investment into procurement systems were significant cost savings — in my four years at ISS, we were near achieving £150 million of bottom-line savings for the organisation. Those are big numbers, so when you mention funding for new systems that allow for big changes, CEOs and CFOs listen. I’m a big advocate for linking the power of these systems with spend insight, supplier performance, and accreditations. Do that and you can deliver something pretty wonderful, that delivers real commercial opportunity for the business and its customers.

At FirstPort, I’ll continue to concentrate on getting the most out of our new systems, refining what’s currently in place and deploying software to improve our supplier accreditations for supply chain assurance. That, along with the digital roadmap, means I can provide a very compelling offer to our customers featuring a whole host of services. The overall intent is to take us straight through from doing procurement to contributing to top-line growth and supporting acquisitions and so forth. Procurement and supply chain are a strategic asset for any organisation and I’m really excited to deliver on that for FirstPort.

You’ve worked in procurement for over 25 years in various sectors and all around the world too. How did you get to where you are now and what changes have you noticed across the years, cultures, and industries?

My journey into the profession started with an industrial placement with Exxon Chemical as part of a business studies degree. I guess you would describe it in old supply chain terms as “distribution” — it was booking containers of chemicals being shipped across of the UK. I enjoyed that and then went back and specialised in logistics.

Afterwards, I got a job at IBM in a subset of the supply chain related to manufacturing and delivery, before moving to BAT in the global central supply chain, when “supply chain” as a term became popular. They were doing some exciting stuff and it was a real privilege to work for them where I spent a lot of time in the Middle East honing my skills in areas like planning and inventory management.

A couple of years after leaving BAT I was sponsored to do an MSc in Supply Chain Management at Cranfield while working for Tyco Healthcare. I loved it. It was an amazing course and I was introduced to a global network of people that I’m still in contact with. It stretched me at a time where I needed to be challenged. I also had a brilliant boss at the time, Regis Simard, who encouraged me to experiment within the business. We were running a factory unit in Gosport for a healthcare company and with Regis’ backing, I was able to deploy the things I was learning into that experience. It was probably one of the most fun times in my career. Having fundamentally changed the way we did things at Gosport, I got offered a job to work in the US, moving first to Connecticut, then again to the head office near Boston. I was able to take best practice and replicate some of what I had done before on a much bigger scale, while still learning new skills.

What’s interesting about the US is there’s a completely different culture around work. There’s a real can-do culture which I loved and there isn’t that stigma of failure. Instead, there’s a sense of curiosity around giving something a go and seeing if it might work. In the UK, there’s definitely more of an aversion towards that. Failing fast, and rapidly improving from those learnings, is an approach I’ve kept with me from my experience in America to make sure my teams and I deliver the best.

In terms of the evolution of procurement, things have got much faster and more intense. Corporate supply chain was previously seen as just a function, whereas now if you do it really well, it can be a centre of excellence. It becomes the place people come to for solutions and to ask if there’s a better way of doing things with — ‘How do I engage this supplier?’ ‘What’s the best way to buy or contract with them?’ More importantly, it is central to digitisation and improving productivity and efficiencies.

COVID-19 also highlighted more than ever the importance of your procurement team being able to successfully navigate supply chain challenges and operate as an integral strategic partner to the business — having the right people, with the right training and expertise is critical to achieve that. Companies are also seeing the benefits of procurement specialists with experience from a range of industries.

My aim now is to pour all of my experience and invest that into FirstPort. So far I’ve had a lot of support and have been hugely empowered by my new boss so I’m loving it!

TL; DR

● I’ve distilled priorities at FirstPort down into three areas over a three-year plan — demonstrating value for money; managing risk and safeguarding reputation; providing excellent service on site.

● Disruptive technology helps navigate environmental challenges (like COVID-19). Innovation from start-ups and smaller suppliers can be a route for growth and help quicker response to changing market conditions.

● A good ERP system, combined with a great P2P solution, is a powerful toolset that should be so intuitive that it doesn’t need an instruction manual and makes everyone’s lives easier.

● The power of digital software is in the big data, which creates valuable insight that can drive aggregate improvement or reduce risk.

● Procurement is a strategic asset that contributes to top-line growth. What was previously seen as a function can now be the centre of excellence that’s at the heart of digitisation.

● Trends around procurement: it’s faster and more intense, companies are looking for more well-rounded professionals with experience in multiple industries to help make procurement a strategic partner to the business.

About Derren Chamberlain

Derren has an MSc from Cranfield and BA from Bournemouth University. He is a lean and Six Sigma practitioner. Derren is married to Kerry and they have two daughters, Lauren and Freya. Derren is getting too old to play 6-a-side football twice per week so has started HITS / Boot Camp instead.

About FirstPort

FirstPort is the UK’s leading residential property services provider, caring for 290,000 homes in England, Wales and Scotland, across 5,000 developments. With over four decades of experience and 4,000 employees, FirstPort works with developers, investors, freeholders and over 1,000 Resident Management Companies.

FirstPort is a member of the Association of Residential Managing Agents (ARMA), the Association of Retirement Housing Managers (ARHM), and Property Managers Association Scotland (PMAS). It holds a Five Star Rating from the British Safety Council, has been awarded the British Safety Council’s prestigious Sword of Honour, is an accredited Safe Agent and belongs to The Property Ombudsman. FirstPort holds a Silver Investors in People accreditation and has been named as one of the UK’s Top Employers by the Top Employers’ Institute for the last three consecutive years.