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Case Example:
Procurement Transformation /
e-Sourcing Pilot
Industry
Chemicals & Global Civil Engineering
Client
Global leader in the polymer engineering protection of civil engineering structures
Background to the Procurement Transformation / Purchasing Transformation - e-Sourcing Pilot
Any purchasing activity had historically been conducted by those responsible for ordering raw materials. Consequently sourcing and negotiation were, of necessity, relegated to part-time activities and were fitted around scheduling suppliers and expediting deliveries.
The client had no previous experience of e-Sourcing, and some members of the Executive team thought it might be more of a procurement consultancy gimmick than a tool to bring substantial value to the business. However, they recognised there could be significant benefits from investing in a more strategic approach to purchasing and were particularly interested to see what could be achieved by sourcing globally, rather than primarily from domestic suppliers.
Objective
- Analyse the business' spend and prioritise category opportunities for an intensive e-Sourcing pilot project initially on a low-risk raw material category, to demonstrate the potential scale of future benefits if a longer term investment were to be made to:
- employ professional procurement / purchasing expertise full-time
- adopt an ongoing e-Sourcing approach
- source from global and regional not just domestic suppliers
- Review the benefits of subscribing to a series of already negotiated price advantaged contracts for many miscellaneous categories of indirect / general expenses purchases from a specialist Spend Consolidator.
The combination of both initiatives was packaged to ensure a rapid pay-back, low-risk evaluation for the client.
Steps Taken
- Evaluated the benefits of subscribing to the Spend Consolidator's contracts
- Managed the successful implementation of the e-Sourcing platform
- Reviewed the business' spend profile by category
- Agreed the category of spend to pilot the e-Sourcing approach
- Prepared attachements for the e-RFQ including:
- Historic Demand Patterns
- Company Presentation
- Company Accounts
- Rules of Engagement
- Product Specifications
- Others
- Researched potential global suppliers for the pilot category
- Configured and tested the pilot e-RFQ event
- Launched the pilot e-RFQ and received quotations from suppliers on three continents
- Evaluated the results
- Handed over to the client
- Advised regarding the profile of a permanent hire.
Results Delivered
The delivered benefits were:
- Annual savings from subscribing to the Spend Consolidator's contracts, which helped to ensure the overall payback for the assignment was ~4 months.
- 22% saving from a European supplier for the pilot e-RFQ using the e-Sourcing platform.
- Client retains access to the e-Sourcing platform for future projects.
- Client has a strong understanding of the tangible benefits
of:
- employing professional purchasing expertise full-time
- adopting an ongoing e-Sourcing approach
- sourcing from global and regional not just domestic suppliers
- Client advised on the profile of a permanent hire
More information about the client of the Procurement Transformation / Purchasing Transformation e-Sourcing Pilot
Procurement Transformation / e-Sourcing Pilot Client Reference
"Our key reason for appointing David on an interim role was to establish in our own minds whether a long term investment in a senior procurement team would give us a return on our investment. David ably demonstrated this..."
"At all times [David] conducted himself in a professional manner, and was able to argue his point effectively and calmly, even when under fire from the sceptics in the organisation, to an extent [that] he had a positive impact on the mindset of a number of people involved in procurement".
See additional extracts from this client's reference about the e-Sourcing Transformation project in the sidebar to the right.
Full client reference 
More Information on e-Sourcing
More Procurement Transformation - Case Examples:
© www .interim-management-purchasing.co.uk June 2012 |
A global leader in the polymer engineering protection of civil engineering structures.
“David was appointed in the role of Interim Group Procurement Director"
"Using the Ariba e-Sourcing platform, David was then able to demonstrate the effectiveness of this practise with a 22% saving in this chemical category"
"I wouldn't hesitate to recommend David's services to any company".
Full client reference |
