Delivery insights

Changing the way doing business in procurement

Client Situation

Our client, a decentralised company, faced challenges in its procurement function. Procurement was fragmented among locations and business units, workflows and approvals were inefficient and technology was not exploited fully, while other internal business functions considered procurement as a strictly transactional activity.

Top management aspired to transform procurement into an integrated team, centrally managed, in order to fully contribute to core company competencies, and better manage costs, while changing internal perceptions.

The way to problem solving
Our approach in designing a new procurement operating model encompassed the following:
  • Interviewed procurement personnel, other internal stakeholders, and selected strategic suppliers and provided a detailed assessment of procurement strategies, organization, processes and competencies
  • Classified spend into macro categories and groups to enable effective management
  • Developed alternative options for the appropriate organisational model and assessed against key criteria, such as alignment with overall business strategy and objectives, internal buy in, support of roles, clarity and employee motivation
  • Defined the new organizational model bringing the required balance between local and central operations during joint client-advisor working sessions
  • Mapped the new procurement processes, leveraging the capabilities of the company's ERP system
  • Developed a coherent performance based reporting system for the procurement function
  • Designed a detailed transformation roadmap to guide change and trained the sourcing teams in the new operating model.
Outcome

Our work enabled our client to deploy a new business model in procurement.

We designed an effective governance scheme that embraced procurement units across locations and business units. We organized procurement around standardized spending categories, thus enabling our client to perform thorough analyses. We enhanced control over indirect spending categories by implementing a centralized approach. We streamlined existing processes and introduced new ones for contracted and not contracted goods and services to facilitate and speed up purchases. We introduced a robust reporting system, including a detailed scorecard for strategic suppliers, covering key aspects, such as quality, safety and sustainability, delivery, cost effectiveness and service responsiveness. Finally, we facilitated a targeted implementation of the transformation process, and managed to change internal attitudes. Procurement is now perceived as a key player in the company's strategic direction.


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