For help in developing the business case and architecting the procurement operating model that would support the organizations goals, this company turned to Purchasing Practice:
Situation
- Supplier engagement focused on maintaining the status quo rather than creating value
- No clear understanding of supply market
- Procurement not engaged in key spend areas
- Week processes and lack of available templates and guides
- Procurement team lacked necessary category management skills
- Incomplete information for resource allocation
Approach
- Using our ACT process to engage with the procurement team and internal stakeholders
- Identify current situation
- Conduct detailed spend analysis and identify category structure
- Conduct opportunity analysis and identify a portfolio of value added initiatives
- Build the business case for change
Recommendations
- Relationship restructuring and strategic options with current and future supply base to build a more competitive environment
- Implementation of a Category Management Structure
- Category Management Process and governance
- Prioritized category initiatives over 1-2-3 year program
- Training for procurement team
Benefits
- With Purchasing Practices help, the client secured executive support and carried it through into the organizations business plan
- More than $30m of implementable opportunities identified including $5m of quick wins.
- Robust processes with templates and guides
- Increased procurements visibility and business contribution
Executive and stakeholder feedback was excellent with increased awareness and ambition for procurements contribution to reducing claims cost.