Feiring brought in interim manager to establish new purchasing function

Since the 1960s, the family-owned industrial group Feiring AS has delivered several hundred million tonnes of crushed stone, gravel, and asphalt and received tens of millions of tonnes of excavated material. Every year, they buy goods for half a billion Norwegian kroner, but they have not had a professional purchasing function – until now.

Permanent employment, consulting company, or interim manager?

As the company grew, and the third generation was on its way in, a transition period began, of renewing and professionalizing the organization:

– Procurement was an area where we saw we needed more structure, a clearer strategy, and greater focus. Until then, it had been a decentralized task. Now we wanted to make it a strategic role, says Espen Lerfald, who in 2018 took over as CFO of the company.

Permanent hire, consulting company or interim manager?

The group management concluded that the company did not have the capacity or competence to establish a purchasing function. They discussed several possible solutions. Should they hire a permanent Chief Procurement Officer right away? That would take time.

Should they go to one of the big consulting companies? They would probably get access to an excellent team of consultants, but would they get the necessary grounding – and someone who would be theirs completely until the job was done?

The choice fell on interim management:

– We had previously hired an interim manager who did an excellent job of helping us position ourselves to ride the digitalization wave. An interim manager could raise the standard in a short time and work 8-10 hours a day with the organization for several months. We needed someone who could be an insider, which is more difficult with a classic consulting project, says Lerfald.

Interrupted by Covid19 and new scope formulated

Interim manager Kristin Ødegården Eliassen started up in February 2019, just before Norway locked down due to Covid19. The plan was for her to work for 9-12 months, but until Feiring had an overview of how the pandemic would affect the company, they decided to cut their cost base, and thus the interim assignment was put on hold. The assignment was restarted in May, but by then, Eliassen had accepted a permanent position in another company, so the scope of the assignment had to be reformulated. Nevertheless, much was accomplished in a short time.

– We are brilliantly satisfied with Eliassen and with how Interimleder AS carried out the process. She quickly became acquainted with the challenges at hand and delivered value early. In the seven months she was with us, she laid a solid foundation, and when the new purchasing manager is in place, she will return to do a proper handover, says Lerfald.

Handing over the baton

– I really enjoyed working at Feiring. They welcomed me with open arms, and the project was very well grounded. Short decision-making paths and high commitment from everyone I worked with made it easy to accomplish things. The job is not over until I hand over the baton to the new purchasing manager. Still, I am confident that the foundation I helped lay will make it easier for them to continue the run in that role, says Kristin Ødegården Eliassen, who now works as a procurement manager at Handelsbanken.

About Feiring AS:

• A family-owned industrial group established in 1962
• 184 employees, MNOK 670 in revenue in 2019
• The group operates in five business areas:
  • Crushed stone and gravel
  • Asphalt production
  • Operation of landfills for receiving clean excavated materials
  • Geosynthetics, sales and consulting
  • Real estate and land development
  • Familieeid industrikonsern etablert i 1962

Situation and challenges:

• Procurement was a decentralized task that needed priority
• The need for strategy, contracts, and processes increased with the growth
• Lacked competence and capacity to establish a purchasing function

Goals and measures:

• Start the establishment of a purchasing function
• Mapping processes
• Building a foundation
• Develop policies, standardized contracts, and processes
• Conduct spend analyses
• Make renegotiations and sign new contracts

Results:

• Established standard requirements and guidelines for suppliers to Feiring, including ethical guidelines and requirements for HSE and impact on the external environment.
• Completed several tender processes that will improve deliveries to Feiring and realize savings on both time used and actual cost.
• Established a solid and dynamic system for ongoing spend analyses.
• Established internal guidelines for the implementation of tender processes and follow-up of suppliers.