T.S.G. COMPANIES PURCHASING CONFERENCE
WOKING, UK. 51-1-1 TO 7TH MAY 1993
ATTENDEES: B&W - Chuck Dawson, BATCF - Hermann
Schneider,
ITL - Tom Lee, Souza Cruz - Divaldo Gomes.
BATCo - Ed Watt and Procurement Dept.
At the TSG meeting of the 24th February, it was
agreed that a meeting of the
Group's purchasing managers should be convened to
consider the rationalisation
of specifications and co-ordination of purchasing
of wrapping materials. From
this. recommendations were to be reported to the
TSG meeting of 19th May.
Prior to the purchasing meeting all companies were
surveyed about Current key
wrapping material 'supplies. This information was
tabulated, analysed and then
presented to all delegates. The focus was on
specifications, volumes, values and
Suppliers.
All delegates agreed that the meeting had been of
significant value and should
be repeated at regular intervals. The consensus
was that without such exchanges
the BATIndLlStries Companies are putting
themselves at a commercial
disadvania2e to suppliers and competitors. With
exchanges like this, the
opportunity exists to establish commonality in
pricing baselines and approaches
to material and supplier issues.
The data exchange confirmed the approximate total
value of spend estimated for
%k rapping materials at over S 1.2 billion per
annum. It also identified apparent
purchasing opportunities for all 5 companies that
will now he reviewed locally in
terms of both cost and specifications.
The discussions identified areas of potential
co-operation, both between
individual companies and within the whole group,
where other Companies
knowledge, expertise, information or purchasing
voiume can add value.
Although each company is operating in a different
environment with different
objectives and priorities, it was noted that major
issues and philosophies were
converging.
Specific issues that vv-ere noted included: -
Vendor rating - the use of a common system.
Specifications of materials - to a common
standard,
Qualification procedures for suppliers and
materials.
Print origination - particularly electronic
systems,
Systems developments in material and inventory
mana ement,
Electronic Data Interchange.
It was agreed that these specific issues should be
addressed wherever possible in
a consistent mariner around the Group.
CD
c0
I-D
CN
BATCo document for Province of BritiSh Columbia 26
October 1999


It was recognised that Purchasing is only part of
the 'mix' of decision makers
relating to wrapping materials. Others include
Production, Research and
Development, Product Development and Marketing.
Some of the major
material specification issues eg Filter Tow and
Cigarette Paper rational isation,
require agreement and approval by all parties in
all companies if the benerits
identified are to be achieved.
Communication between other decision makers would
be encouraged by this
group, in particular relating to the product
development and quality issues
surrounding cigarette paper furnish change and
filter tow rationalisation projects.
RECOMMENDATIONS:
I The meeting agreed that suppliers would be told
of the BAT Group meeting
and its objectives and advised that we are
exchanging information.
2 Suppliers primary contacts in each company
should remain the same.
3 The supplier prices exchanged should remain
confidential and not be used
without the prior knowledge of the BAT company
contributing the information.
4 Information exchanged would be reviewed by
delegates within their own
organisations and the potential impact of it
identified and reported at the next
meeting, including specific actions yet to be
undertaken.
5 The data circulated will be reviewed by all in
order to identify and formalise a
Structure for future information exchange at the
next meeting. In the interim,
other major pUrchase information should be
surveyed and exchanged in similar
manner with the outstanding gaps/errors in the
current collated information
being Clirninated.
6 Following each company's internal Teview of the
above, the next meeting to be
held before end 93, will determine delegates,
timetable and terms of reference
for future meetings.
The TSG is requested to confirm. its support for
the above recommendations.
CD
co
ON
BATCo document for Province of British Columbia 26
October 1999