BAA moves its procurement online

Driving down those supply costs...

BAA, the world's largest airport operator with revenues of more than £2.2bn, is moving all of its suppliers to an online procurement system.

All 1,500 suppliers have agreed to swap fax for browser in a move to drive down BAA supply chain costs from current level of £1.2bn.

BAA will be using software from Burns e-Commerce Solutions. The companies would not disclose the value of the deal.

In 1999, BAA was spending on average £92 per purchase order. The UK average is between £65 and £95. By streamlining its supply chain it has now reduced those cost to £19.

Tony Douglas, group supply chain director, said: "We are one of the best kept secrets in managing a large and diverse supply chain. All 1,550 of our suppliers have committed to convert by mid next year."

Since August of last year, the only way BAA employees have been able to make a purchase is electronically via a procurement system.

Douglas added: "This deal is the final link in our procurement-to-pay process."