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Whitbread on navigating major supply chain transformation

Simon Leigh has been kept on his toes since joining Whitbread two years ago.

When he first joined he was tasked with bringing together the Whitbread supply chain 

across all its businesses, which included Costa Coffee, Premier Inn and restaurant chains such as Beefeater.  

However, last year came the news Costa would be demerged, which led to its sale to Coca-Cola.

“There was a big piece of transformation about bringing together a group function and then very quickly it was effectively broken back up,” says Leigh.

The key learning in such a radical transformation was to ensure a team from across Whitbread’s business disciplines was created early to manage the process, according to Leigh.

“The size and scale of such a transaction [Costa’s sale to Coca-Cola] does not come along that often,” says Leigh. “The importance of having really solid rigour around effectively getting to completion is so critical and the team we had in place linked across every single area.”

“It is less about cutting costs and much more around how can you effectively join up what we buy and how we move it, and make it much more linked within the value chain in our business"

This joined-up approach is something Leigh is attempting to instil through his dual role of overseeing both supply chain and procurement.

Leigh has learnt from 20-years of experience in procurement, including roles at Tesco, Shell and BAE, that solely focusing on cutting costs is “the law of diminishing returns”.

“It is less about cutting costs and much more around how can you effectively join up what we buy and how we move it, and make it much more linked within the value chain in our business,” says Leigh. “It is about really looking at how we can drive the top line and how we can reinvest what we save to make the right decisions.”

Whitbread is seeking to drive operational efficiency through technology and Leigh believes that data is critical in making the company’s network as efficient as possible.

“It is ultimately about how we can forecast and demand plan much more effectively to help us drive and leverage the scale of the spend that we have because a lot of the time procurement and supply chain departments are engaged after decisions have been made,” says Leigh.

Demand planning and forecasting

Whitbread currently outsources its demand planning and forecasting systems to a third-party logistics firm, but Leigh is open to moving some processes in-house in the future.

Leigh is also an advocate of investing in systems to drive much more machine-learning demand planning and forecasting.

“One of the big drives for me is getting better quality data,” says Leigh. “There is a hunger for data and real-time information. The challenge for me will be how systems-driven can it be, and what is the manual intervention that will be required?

“It is what can be machine learned rather than what is absolutely necessary to have a person doing.”

However, large-scale implementation of AI technology comes at a cost and must be balanced with the need to keep on top of trading and delivering value for shareholders.

“It becomes a moral question of ‘is it the right thing to be doing?’ or is it about continuing what you are doing, which might be slightly less efficient but it works,” concludes Leigh.

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