Global transportation company
Our experience...
We delivered comprehensive external procurement support to provide a centralised function for the Client which involved the following:
- Production of ‘Best In Class’ procurement policy, processes, and full suite of tender documentation and templates;
- Investigation, categorisation, and prioritisation of opportunities for cost savings within the third-party supplier expenditure profile for UK and European operations;
- Developed a series of category and supplier strategies for the UK expenditure profile and conducted a range of formal strategic tenders across key Facilities Management, Human Resources, Transport and Warehousing areas of spend to deliver savings against the cost base; and,
- Analysis of initial quotations submitted to the UK business for ad hoc requirements by third-party suppliers with further negotiation and sourcing to ensure that the Client received the most competitive quotation available in the market.
- the development of closer working relationships with subject matter experts and business areas to produce tender documents with clearly defined requirements and selection criteria;
- a standard selection process for new suppliers through formal tendering resulted in the selection of suppliers who not only provided the best commercial offer, but clearly meet the defined business requirements. This was demonstrated by high levels of satisfaction across the organisation with the suppliers selected; and
- the introduction of Supplier Relationship Management through the introduction of Service Level Agreements, thereby ensuring that service levels were maintained throughout the life of the contract and that value was not eroded.
Our approach…
For the strategic sourcing projects within the key category areas, the initial mobilisation stage involved a detailed review of the category spend data, internal process review, external market review and requirement definition. Once the mobilisation stage was completed; sourcing projects were prioritised in line with contract end dates and our consultants engaged with stakeholders from across all parts of the organisation to obtain sign off for the sourcing strategy. Once approved we would commence our market review through formal structured Requests For Proposals. Once the supplier had been selected we managed the commercial negotiations and finalised contractual terms.
For our procurement support on ad hoc requirements, our consultants would be available for the Client to discuss the opening quotation which had been collected from a supplier. This would involve a detailed discussion to understand the requirements and market approach which had been taken initially. Our consultants would then conduct a negotiation with the supplier who submitted the original quotation to collect their best and final offer. Alongside this negotiation process, an external market review would be conducted in order to collect best and final offers from credible alternative suppliers in the market. Once the tender process had concluded, our consultants would provide a summary back to the Client which would detail the best and final offers, the cost reduction achieved, and outline our recommendation of next steps.
Stakeholder engagement was vital throughout the end to end process for both project workstreams. Our consultants would provide structure and decision support to stakeholders, but it was important that they felt that overall ownership remained within the budget area. By involving the Client in the process we ensured that stakeholders felt ownership of the process and developed a deeper understanding of the marketplace and the sourcing process.
Best practice…
We provided a team of consultants with a deep practical knowledge of procurement, our consultants were quickly able to benchmark existing practices and produce a gap analysis against best practice.
By calibrating to industry best practice procurement principles we developed robust “Best in Class” procurement processes which matched legal and regulatory requirements with the commercial requirements of the organisation.
As an example, the introduction of a seven-stage strategic sourcing cycle resulted in:-
- the development of closer working relationships with subject matter experts and business areas to produce tender documents with clearly defined requirements and selection criteria;
- a standard selection process for new suppliers through formal tendering resulted in the selection of suppliers who not only provided the best commercial offer, but clearly meet the defined business requirements. This was demonstrated by high levels of satisfaction across the organisation with the suppliers selected; and
- the introduction of Supplier Relationship Management through the introduction of Service Level Agreements, thereby ensuring that service levels were maintained throughout the life of the contract and that value was not eroded.
Organisational benefits…
One of the main focuses was the delivery of the cost reduction from the Client’s UK expenditure profile. Our consultants delivered savings of over 30% throughout the course of the projects.
The definition of a clear savings recording methodology was an important factor in ensuring that the benefits are tracked and budgets adjusted accordingly, therefore ensuring that the savings delivered were not diluted by budget overruns elsewhere. The Project Sponsor was the Group Finance Director and we developed a strong working relationship with him in reporting on the saving benefits continuously being achieved.
