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Strategic Procurement

Situation

The client is a global organization offering multiple services that require mainly the purchase of services, large specialized technology assets and construction material. The company just introduced a new ERP system which integrates with their purchasing and inventory management software.

The client wants to ensure that the benefits anticipated from better system support for purchasing transactions and more transparency on the overall spending patterns will be realized and show the predicted impact on the company’s bottom line.

Approach:

  • Systematically analyze purchasing transaction (Spending Analysis)
  • Identify potential to leverage sourcing synergies
  • Identify “Purchase to Pay” Process issues, e.g. payments before payment due date
  • Derive process improvements to cure procurement process issues and leverage identified synergies
  • Develop KPI system to measure effectiveness of implementation of process improvements
  • Setup processes to share improvement ideas between the multiple global supply chain organizations

 

Result:

  • Quick wins have been identified and could be addressed immediately by respective local supply chain organizations
  • The number of vendors and transactions per vendor reduced significantly, e.g. 476 invoices to one Australian vendor could be reduced to just 1 invoice per month
  • Generally the number of process issues went down due to better understanding of the end-to-end process between the Purchasing, Warehouse and the Accounting Department
  • The Area Supply Chain Management and Area Finance Department gained sufficient transparency to enforce further sourcing improvements and comply to the newly launched Sarbanes Oxley governance program
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