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:

  1. Minimal Category management of Indirect spent
  2. Fragmented data that inhibited valuable decision making
  3. Purchasing decisions and transactions functional departments without cen-
    tralized Procurement involvement
  4. Limited performance management or governance controls system
  5. Unclear roles and responsibilities and frequent reactionary behaviors
 
Read Less Read More

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

CONTACT

Achieve similar outcomes
for your organization

Discuss how we can tailor solutions to your organization. 

    What industry are you in?

    What do you need help with?

    Your information: