Project Scope
- Preparing a detailed enterprise-wide spend analysis to help identify and prioritize opportunities
- Executing a rigorous strategic sourcing process
- Providing recommendations to improve overall procurement capabilities and establish a repeatable and sustainable long-term sourcing program
Approach
Conducted key stakeholder interviews from Procurement, Finance, Manufacturing, Engineering, Quality and C-Suite to gather baseline costs and understand current state sourcing processes
Performed a tailored spend diagnostic (spend cube) leveraging spend data from multiple different sources and systems, including the analysis and categorization of $200+M of addressable spend
Executed a strategic sourcing process in the following areas:
Aluminum & Iron Castings, Fittings, Valves & Hoses, Gears, MRO, and Wire Harnesses
Conducted multiple training courses for over 100 professionals in the areas of: Methodology, Effective Presentations, Site Visits, and Negotiations
Built infrastructure to support Best Cost Country sourcing
Developed cross functions teams (Procurement, Engineering, Manufacturing, Quality and Finance) to drive sourcing initiatives
Results
Spend analysis and category prioritization identified up to $40M of potential savings opportunity through three waves of the strategic sourcing program
Delivered more than $20M (21%) annualized savings
Achieved non-price benefits: improved cash flows thru extended terms, improved inventory turns, better On-Time-Delivery, lowered PPM commitments
Improved spend under contract from less than 10% to over 45% while rationalizing the supply base by 35%
Grew Best Cost Country sourcing as a percentage of spend from 7% to 20% with average landed cost savings of up to 30%
Strategic sourcing training successfully embedded best practices and associated tools and templates for ongoing sustainable sourcing savings
