CASE STUDY REF#14
THE CHALLENGE
Drive immediate reductions in Indirect costs and sustainable controls
A global construction products technologies company dedicated to the development of high-performance products experienced rising Indirect year-over-year costs (~$70M) amid declining top-line results. The client engaged ArMur to develop and install the strategy, business processes and tools necessary to drive immediate reductions in Indirect costs and to put in place sustainable controls.
OUR FINDINGS
Identified 5 items for improvement:
- Minimal Category management of Indirect spent
- Fragmented data that inhibited valuable decision making
- Purchasing decisions and transactions functional departments without cen-
tralized Procurement involvement - Limited performance management or governance controls system
- Unclear roles and responsibilities and frequent reactionary behaviors
IMPLEMENTATION
We focused on 2 areas
of impact to improve indirect costs & sustainability
Enhanced existing policies and procedures for
Indirect spend management.
Engaged over 200 employees on brainstorming
sessions and identified 1,000+ opportunities for
improvement.
Developed a prioritized execution plan with clear
ownership and accountabilities to drive.
Standardized monthly P&L expense reporting by
Functional area and spend category to provide
spend visibility.
Implemented monthly functional reviews.
Coached functional leaders on driving the requisite
behavior change across the organization to ensure
sustainable change.
RESULTS
All delivered at a 17:1 client ROI
with $7.4M of Annualized Savings
Reduction in overall Indirect spend
0
%
Reduction across five largest spend categories
0
%
"This level of rigor, savings and clarification of roles and responsibilities is exactly what I wanted to accomplish with this Workstream."
Supply Chain Leader
Global Construction Materials Company
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