Central Co-op - September 2023

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How Central Co-op is creating a sustainable society for all

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Paul Lockwood, Head of Procurement at Central Co-op, outlines the importance of sustainability in his own department and across the entire organisation

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entral Co-op can trace its history all the way back to the mid-19th century, when the modern co-operative movement was just taking off.

Today, it exists as the second-largest co-operative in the UK, having assumed its current form following the merger of Anglia Regional Co-operative Society and Midlands Co-operative Society back in 2013.

At the heart of Central Co-op’s operations is its retail offering, consisting of more than 250 convenience stores across the nation.

On the other side of the business is the funeral division, comprising 180 funeral homes, a crematorium, three stone masonry outlets and a coffin factory. And that’s without even mentioning the organisation’s property arm, responsible for buying, selling and maintaining thousands of buildings.

Many of Central Co-op’s core values remain the same as those established around 175 years ago but, in 2021, the company unveiled its new purpose: to ‘create a sustainable society for all’.

This ethos now stretches right across the business, impacting decision-making and actions at every level of all departments.

That includes in the field of procurement, which is headed up at Central Co-op by Paul Lockwood, who joined the company in February last year.

“Within that new strapline there are numerous themes,” explains Lockwood.

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Paul Lockwood, Head of Procurement at Central Co-op centralcoop.co.uk

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“ It’s amazing how, more than 150 years after the first co-ops were started, their core values are still just as relevant today” PAUL LOCKWOOD

HEAD OF PROCUREMENT, CENTRAL CO-OP

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“There’s the environment and sustainability; there’s self-funding; there’s inclusion; and there’s self-help, as well.

“You may think when you join Central Co-op that you’re joining a movement, but actually what you join is a social movement, which makes for an interesting dynamic. It’s amazing how, more than 150 years after the first co-ops were started, their core values are still just as relevant today.”

Energy crisis accelerates Central Co-op’s solar strategy It certainly hasn’t been a straightforward start to life at Central Co-op for Lockwood, who

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PAUL LOCKWOOD TITLE: HEAD OF PROCUREMENT COMPANY: CENTRAL CO-OP LOCATION: ALREWAS, ENGLAND

became Head of Procurement just a couple of weeks after the global energy crisis escalated thanks to Russia’s invasion of Ukraine.

However, as the saying goes, in the midst of chaos there is also opportunity. That opportunity for Central Co-op came in the form of accelerating its investment in solar power, an important future-proofing strategy that had long been discussed.

Solar panels were installed at two convenience stores by the end of July; within a further eight weeks, Lockwood and his team had tended and contracted a provider to roll out solar panels at no less than 180 stores by end of 2023.

EXECUTIVE BIO

Paul Lockwood has worked in the field of procurement for more than 20 years, including in both the public and private sectors. For six years, Paul headed up procurement at BNP Paribas Personal Finance, before moving to Dignity in 2019 to lead the company’s procurement transformation programme. Last year he joined Central Co-op to look after GNFR for the entire retail and funeral business. Over the past 18 months, he has overseen the rollout of solar panels across 180 stores and modernisation of the organisation’s ceremonial fleet. Paul has a proven track record in delivering year-on-year savings and process improvements through the application of innovative business techniques and by optimising operating and delivery models.

Inspired PLC: Energy procurement, cost control and net-zero leader Through expert insight and tailored advisory services, Inspired PLC empowers businesses to manage their energy costs, consumption and net-zero strategies.

for any organisation, but with the right support and advice, businesses can achieve these goals in a commercially and operationally beneficial way,” says Alex Mackey, Account Director at Inspired PLC.

Inspired PLC are a leading technology-enabled service provider supporting corporate businesses to control energy costs and transition their journey to net-zero carbon.

“Our purpose can be summarised as helping businesses manage their journey to net-zero and responding to the climate emergency whilst controlling their costs.

Energy is a significant overhead and now a board-level concern for UK organisations. Inspired PLC provides the expert insight and tailored advisory services to help businesses manage their costs, optimise energy consumption and reduce their carbon emissions.

Inspired PLC also helps clients to prove their net-zero and ESG credentials to their investors, customers and other stakeholders.

“We know that reaching netzero is a massive challenge

“Our solutions create clear and actionable long-term plans to help realise these goals.” All businesses need to understand how to effectively control their 4Cs; cost, carbon, consumption and compliance.

Co-operatives, owned by members, aim to positively impact their communities, including the environment.

They typically have large and diverse portfolios, so energy and carbon make up a key operational cost. Energy and sustainability is often seen as

an area of complexity, but it is also an area of opportunity to look to reduce impacts on the environment wherever possible.

Inspired PLC is assisting cooperatives to formulate a strategy to best manage these energy risks through innovative and collaborative procurement solutions, while exploring every avenue to reduce consumption and ultimately carbon emissions, helping to further those goals to have positive impacts on their community.

Mackey concludes: “In light of the mounting challenges businesses encounter in addressing sustainability and ESG concerns, it is crucial for them to engage expert advisors who can demonstrate to their stakeholders a comprehensive plan to effectively manage costs, achieve carbon neutrality, and enhance their ESG performance.”

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“ For us as an organisation, investing in a green funeral fleet is massively important, and there’s also an expectation from the public” PAUL LOCKWOOD

HEAD OF PROCUREMENT, CENTRAL CO-OP

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Moreover, in May the company opened a new shop in Staffordshire which, for the first time, had panels pre-installed.

“We’re just over a third of the way through that journey and we’re very fortunate to have an executive and board who want to kick on with the investment,” says Lockwood. “We’ll have payback in less than three years based on our current commercial model which, for us, is unheard of.

“For me, it’s brilliant as well because it’s something I’ve always been passionate about.”

Praising Central Co-op’s key partner on the project, he adds: “The supplier we’ve had, SolPV, has been amazing and really hit the ground running.

“Now, the exec is asking me ‘what’s next?’, which is exciting and it’s great to be challenged like that.”

Bidding to become self-sufficient taken such as investment in more Creating a sustainable society for efficient freezers and putting all covers numerous aspects but, doors on chiller cabinets. as Central Co-op’s solar efforts “It all contributes,” Lockwood Year founded suggest, a significant proportion goes on. “It’s all very well of the strategy relates to energy producing green electricity, but usage and becoming more selfit’s no good if you’re then burning Number of sufficient in this space. it off really quickly.”

Employees In the relatively near future, That all-important it is hoped the organisation will co-operative team spirit is truly be producing 100% of its own coming to the fore from an energy Revenue power, which is evidently a big perspective, with the launch of a ask. Nevertheless, things are most new consortium including Central certainly heading in the right direction.

Co-op and a host of independent co-ops.

Lockwood forecasts that the solutions The goal is to collaborate on the purchase currently being put into place at of utilities, while sharing knowledge and convenience stores will produce around investment opportunities.

30% of the energy needed in a supermarket “This is a journey we’re going on together,” setting. Within that, simple steps have been says Lockwood. “We’re trying to share that

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How SOL PV helped Central Co-op become a greener business SOL PV has become a standout in the renewable energy industry and is helping organisations like Central Co-op to achieve their sustainability goals SOL PV Group is an established name in the solar sector, specialising in the installation of PV panels.

While an increasing number of requests for projects on the ground are flooding in, the company’s bread and butter remains the commercial rooftop sector.

Very few large installers in the UK are doing similar work to the same standards, making SOL PV a standout in its field.

Forming a partnership with Central Co-op In early 2022, Central Co-op invited SOL PV to tender two trial sites with a tview to rolling out solar capabilities across its portfolio.

The trials proved successful and ultimately resulted in the go-ahead for installation at 180 Co-op sites, including convenience stores and funeral homes.

Already, the aforementioned trial locations are producing an energy yield which is 10-15% greater than originally predicted.

“We’re very much focused on quality products and materials because, for us, it’s all about safety,” says Brett Reynolds, Sales Director at SOL PV.

“Supermarkets open seven days a week are fantastic models for utilising solar because they’re using 90-100% of what they generate.

“Everyone’s happy because we’re making greater savings and a quicker return on investment for the Co-op.”

A good time to go green Reynolds calls the nine years from 2010 to 2019 a “solar coaster” thanks to the government’s feed-in tariffs scheme.

Although customers were paid for exporting energy to the National Grid, firms like SOL PV were confronted with a “nightmare” in trying to keep up with demand.

Now, the market has matured and can stand on its own two feet.

Reynolds adds: “Two factors are stimulating the commercial marketplace: the rise in energy prices and this requirement for businesses to reduce their carbonfootprint.

“That, combined with the reduction in price of materials, means solar has become a fantastic addition to commercial buildings and we’re seeing extremely favourable ROIs on these systems.”

“ What we’re doing is quite cutting edge for the industry and it’s an exciting time for us” PAUL LOCKWOOD

HEAD OF PROCUREMENT, CENTRAL CO-OP

good information between ourselves to help each other on that journey.

“There has always been co-operation, but last year – with the energy crisis and cost-ofliving crisis – created a need to do more, and it has been fantastic. Coming together and sharing resources will help us to be more sustainable, not just as individual societies but as a movement.”

Energy strategy extends to colleagues Crucial to Central Co-op’s values is looking after its people, to the extent that its investment in renewable energy capabilities has also been extended to colleagues.

“It’s great investing in our stores,” continues Lockwood, “but part of what we do as an organisation is invest in our colleagues.”

After receiving various enquiries, Central Co-op reached an agreement with its solar provider to extend the commercial terms of their deal to staff, giving them the option to purchase clean energy infrastructure such as panels or EV chargers.

“For us, it’s about putting options in front of our colleagues and leaving the decision up to them,” says the procurement chief. “It’s quite a unique scheme, but it’s something we had the ability to do.

“So far, we’ve had about 200 colleagues show interest and it’s only been going for a few weeks. It definitely helps as well that we’re offering them a trusted provider with a quality product that is going to last.”

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Funeral fleet going green Despite the industry’s obvious traditions, Central Co-op has been careful not to overlook green aspirations in its funeral business, too. This process has begun with its fleet of vehicles, which can cost upwards of £120,000 apiece – making for a complex and expensive transition.

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Paul Lockwood, Central Co-op’s Head of Procurement Highlights Sustainability’s Organisational Impact WATCH NOW

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Central Co-op is the secondlargest co-operative society in the UK Central Co-op employs around

7,700

people across divisions including retail and funeral services Central Co-op’s history can be traced back to the modern co-operative movement of the mid-19th century

“It’s a significant investment,” Lockwood explains. “For us, we had an ageing fleet and we had reached a crossroads, so you could say it’s been a case of right place, right time.”

In looking to go green, Lockwood’s team went through an exhaustive procurement tender exercise, before finally identifying the Ford Mustang Mach-E as its limousine and hearse solution. The new fleet is due to be rolled out over the next 12 months.

Investment has also been made in charging infrastructure courtesy of a new partnership, and will evolve as the fleet expands: “For us as an organisation this is massively important, and there’s also an expectation from the public. This investment has been really popular with our colleagues as well.

“We are a traditional business, but we have to evolve. When we’re talking about helping the environment, we need to look at every aspect of what we do.

“I think what we’re doing is quite cutting edge for the industry and it’s an exciting time for us as a business. There are bigger providers and bigger competitors out there who are maybe not as far down the road as we are in this space.”

‘Amazing’ partners across Co-op’s business Clearly, a vast operation like Central Co-op cannot function without crucial input from partner organisations.

“We’ve been fortunate to have some amazing partners,” says Lockwood. “One of the things we talk about with regards to partnerships is trying not to just have a transactional relationship. We want to put in effort across the business – not just in procurement – to drive value and sustainability.”

One such example of a fruitful partnership is with Lyreco, which has spent time trying to centralcoop.co.uk

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“ One of the things we talk about with regards to partnerships is trying not to just have a transactional relationship. We want to put in effort across the business – not just in procurement – to drive value and sustainability” PAUL LOCKWOOD

HEAD OF PROCUREMENT, CENTRAL CO-OP

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Central Co-op has also entered into a partnership with Inspired Energy, a consultancy which is helping various co-ops with the process of buying utilities.

Lockwood continues: “Their insight so far with regards to the environment has been massively powerful. They’re helping us future-proof ourselves as an organisation which, in essence, involves buying smartly and buying with the right people – but also looking at who we are in terms of sustainability, which is at the heart of what we do.”

understand the motivations of Central Co-op and its colleagues. As a provider of supplies and workplace solutions, the firm introduced a bio-hygiene cleaning product which has proved to be a roaring success in terms of cost reduction and environmental benefits.

Technology-wise, Central Co-op recently implemented a purchase-to-pay solution provided by Zycus, a pioneer in cognitive procurement software. Positive impacts have already been seen in various departments through the automation of processes which were previously paperbased or required manual inputting.

Lockwood adds: “Zycus is a key partner for our P2P digitization strategy overall. We’re trying to create a core of suppliers who we work with and, instead of us just going to them, we want it to be a two-way street, giving them the opportunity to talk about what they can do.

“For us, with our suppliers, whether it’s in the retail business, property business or funeral services, that’s a common approach we’re trying to roll out at the moment.”

Looking ahead With eyes on the future, Lockwood believes macro-economic factors and the growing importance of sustainability must remain key considerations in the procurement space.

The war in Ukraine has, of course, had a profound impact on the supply chain and forced companies to rethink their suppliers.

“We are living through turbulent times,” Lockwood concludes. “What’s going on in Ukraine has been utterly horrendous and there has been a huge knock on effect throughout the world.

“One of the things I’m looking at and considering is the ability to source locally because shipping goods over from the Far East is more expensive. Sustainability’s massive as well, so local sourcing is important when we start looking at our carbon footprint.

“I think for us, working in procurement, we’re probably going to find more challenges and demands in understanding who our supply base is in more detail and measuring their impact on the environment.”

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