Project Scope
- Preparing a detailed portfolio-wide spend analysis to help identify and prioritize opportunities
- Executing a strategic sourcing process
- Providing recommendations to improve overall procurement capabilities and establish a repeatable and sustainable long-term sourcing program
Approach
Performed key stakeholder interviews from cross functional departments to gather baseline costs and understand current state sourcing processes and reviewed current contracts: over 45 site visited, 300+ interviews and reviewed 400 contracts
Completed a spend diagnostic leveraging spend data from multiple different sources and systems (700+ categories, over 16,000 suppliers, 400,000 records of AP), including the analysis and categorization of $1.5B of portfolio spend
Created a customized commodity code system for use across all portfolio companies
Developed a go-to-market strategy as a single $3.5B enterprise to leverage the entire spend of all portfolio companies
Executed a multi-step strategic sourcing process as “proof of concept” in the following shared service areas:
Corrugated Boxes, Small Package Shipping, Telecommunications, and Temporary Labor
Conducted multiple training courses for over 50 professionals in the areas of: Methodology, Effective Presentations, Site Visits, and Negotiations
Results
Developed a Spend Cube detailing a consolidated view of what is being bought, who is it being bought from and who (which portfolio company) is doing the buying
Spend analysis and category prioritization identified up to $20M of potential savings opportunity through two waves of the strategic sourcing program ($219M in annualized spend)
Delivered more than $6.5M (14.4%) in annualized savings; projected increase in client portfolio value of over $30M (market multiplier 5X)
Achieved agreements that were transferable (for divested companies) and scalable (new portfolio company could take advantage of the preferred contracts)
Strategic sourcing training successfully embedded best practices and associated tools and templates for ongoing sustainable sourcing savings
