At the Apex: Santam Group Sourcing

Ebrahim Asmal, executive head of group sourcing at Santam

Our economic reality has changed. Today, consumers understand that they must cut back.

Ebrahim Asmal, executive head of group sourcing at Santam speaks about doing what you need to do better but with less

“The days of excess are over. South Africans are more cost conscious than before. For Santam’s group sourcing division, that means cutting out inefficiencies,” says Ebrahim Asmal, executive head of group sourcing at Santam.

The reality is that in selecting the correct partners on a sustainable basis to service the claims supply chain, the ultimate effect is seen in better pricing of the product offering, ensuring that the business is competitive when attracting and retaining clients and ensuring they can service their claims needs in the most cost effective manner.

In practice, procurement policies generally regulate a company’s choice of suppliers, products, purchasing methods and procedures. In light of the prevailing economic downturns and recessions, a group sourcing department can play an essential function in innovating the supply chain and leveraging their spend.

In today’s business arena, the group sourcing department is a far cry from its previously perceived position as a back-office function.

“Consider the supply chain management practices in the mining and motor industries and recently the impact the supply chain has had on the local retail industry. It’s the value and the relationships in that supply chain which has contributed to the success or failure in those industries. In short, procurement has become absolutely critical and this has become a strategic part of the business,” explains Asmal.

“Despite a challenging domestic market last year, Santam continued to perform well due to a number of initiatives, with group sourcing playing its part. Santam’s focus for the year ahead will be on further cost savings related to claims management and direct claims costs as part of the continuing transformation of the procurement environment. We will spend even more time with suppliers, building closer partnerships with our supplier network and bedding down the projects we already have in place,” says Asmal.

A continuous challenge is providing new and innovative solutions and alternatives in the non-claims related spend categories such as leases, travel, printing, etc. where any positive impact is seen in a lower acquisition cost, which is an ongoing focus of business leaders.

Asmal, who was recruited from Engen Petroleum more than three years ago, says the key to retaining business is to find opportunities to keep a client happy: “Look at the way in which we operate. We sell insurance policies but the very next opportunity we may have to retain that same client is when they have to claim. To this end, it has become increasingly important to influence customer behaviors to achieve our goals for mutual benefit,” says Asmal.

Businesses such as Santam need to offer greater convenience and access for our clients. “This approach has led to the creation of conveniently located Santam Drive-In-Centers (DIC). The Santam’s (DIC’s) have become a relied-upon method of regulating and consolidating our company’s supplier base. If a client has a car accident, our DIC can provide us with a proper view of the damage,” he says.

Santam’s existing 15 DIC’s are equipped with a spend direction tool which provides the Santam DIC’s with the top contracted repairers who are able to provide repairs which match the company’s quality standards and pricing policy.

These service centers range from basic DIC’s (where vehicles are assessed and referred to external Motor Body Repairers) to dual assessment centers where vehicle repairs are assessed and the repairs can bedone on the premise or referred to an external motor body repairer.

“In the past year, we also launched these dual assessment centers, our Car Labs, in Cape Town and Pretoria. These facilities have allowed us to do further research into the motor body repair industry and helped reduce repair costs which ultimately contribute to containing premium increases into the future,” says Asmal.

Santam’s Glass Lab – initially attached to Santam’s Car Labs - helps Santam to research alternative sources for quality motor vehicle glass: “The existing price of glass is more or less the same if you consider the big players in that field locally. We recognised the opportunity here. We are now offering our clients a choice of different products, which meets the quality standards of existing products on the market at a significantly reduced price. We are offering our customers the choice to fit alternative glass by discounting the excess payable,” Asmal says.

Santam launched their claims cards to their Personal Lines clients for all non-motor claims. The claims card is issued during the final stage of a claim, which the client can keep for all future non-motor claims. “Santam provides its clients with an updated list of our preferred suppliers who are available to assist you in selecting a place where they can replace your lost items and earn rewards at the same time. This is an example of rewarding our clients who practice good risk-management behavior,” Asmal says.

Santam have also helped claims services drive a process within the Gauteng region to create Towing assessment Centers (TAC) which will follow the same principles of spend direction. Whereby towed vehicles will be towed to these TAC’s for assessment and distribution to the most suitable and cost effective Motor body Repairer.

Asmal says the involvement of Group Sourcing in Santam’s strategic processes required a mind-shift within our business. “Santam is currently investigating the replacement of our product, risk and policy management capabilities. To this end, a project has been initiated that has a work stream to support our vendor selection and software selection decision. This project aims to revise our business operating model.”

“Group sourcing has been part of the planning team since its inception. In relation to management of the traditional delivery aspects of this project, we’ve helped to drive this process and save costs at the same time. The involvement of Group Sourcing from inception led to greater value being extracted from the supplier relationship,” says Asmal.

Asmal says the most important skill he’s learnt since he started at Santam is managing relationships, especially as Group Sourcing is not only Santam based, but services the greater Sanlam Group. “Interpersonal relationships are a big requirement for this job.”

Asmal is firm in his belief that Santam’s leadership has been instrumental in providing the necessary support in achieving the success our group sourcing department has achieved to date: “I’ve received a lot of support from the Executive. We must never underestimate the buy-in from our leadership when you want to implement a lot of change. Their support is critical in this business environment.”