Airey is the confident personification of Laing reborn. The genial 41-year-old was poached from SmithKline Beecham to overhaul procurement policy from top to bottom, from toilet rolls to bricks. He sees the timing of his appointment – two months before the contractor unveiled its lower-turnover, higher-margins strategy – as no coincidence. “Procurement is essential to the successful implementation of the new strategy,” he asserts.
It is easy to see why Laing would want a procurement guru from the pharmaceuticals sector. Construction could do with a bit of the business magic that has driven that sector's recent performance. But what is not so obvious is why Airey would want to leave it for the comparatively parochial construction industry. The answer appears to be his drive to move to a smaller business so he can really make a difference – and get himself noticed. “There was a hesitation about leaving a hugely profitable industry,” he says. “If we get it right at Laing, we will be leading the rest of the construction industry forward, in my opinion.”
Jacket off, leaning back in his chair with his arms folded behind his head, the business studies graduate from Carlisle looks like he does not have a care in the world. But he faces the task of modernising a huge and mysterious system (he has no idea whether Laing has 6000, or nearer 16 000 suppliers), and one that has often paid only lip-service to proper supply-chain management. “Previously, it tended to be organised on a project-by-project basis, where the lessons learned weren’t always carried forward. I want to instil continuity in relationships with key suppliers.”
Airey brings considerable construction experience to his new role. At SmithKline Beecham, he headed the team responsible for its £600m-a-year construction and capital equipment spend. In this role, and later as an international procurement manager working in the Middle East and Africa, Airey was charged with squeezing waste out of SmithKline Beecham’s purchasing procedures. By culling the global supply chain and building closer relationships with the remaining suppliers, 10-20% was cut off the company’s procurement spend.
Procurement is essential to the successful implementation of the new Laing strategy
And that is pretty much what is on the menu at Laing. Whatever the exact number of suppliers now, Airey aims to bring it down to about 250. “Instead of having negotiations, you develop close links with key strategic suppliers,” he says.
To do this will require nothing less than a minor cultural revolution at the contractor. General buyers will become specialist “category managers”. Each will be in charge of buying a particular item for all Laing projects, such as plasterboard or hard landscaping. They will become experts in that field, with specialised knowledge of cost details and performance specifications. And, most importantly, they will have the business acumen to understand Laing’s overall strategy and how they can contribute to it. They will be “entrepreneurs with a flair for business”.
This strategy will complement, and be complemented by, the one-click-does-30-jobs efficiency of e-commerce. From next March, Laing’s Birmingham office will purchase stationery from one supplier over the Internet. Thereafter, it will gradually add items to its shopping basket until, by 2003, it will be entirely digital.