Case study REF#35
The Challenge & Our Findings
implementation
results
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THE CHALLENGE

Optimize SCM processes & spending

Markets and pricing pressure drove the organization to review its Supply Chain Management (SCM) processes and spending thoroughly. A more robust Procurement/Vendor category management and sourcing capability was required. The company also desired to optimize Supply Chain spending and deliver savings over 10%.

OUR FINDINGS

The initial assessment revealed six critical areas needing immediate attention: 

  1. Inaccurate demand forecast impacted demand planning, sourcing performance and benefits.

  2. The Organization lacked cross-functional team integration, buy-in and ownership for SCM initiatives.

  3. Lacked required resources to execute the outlined objectives and deliver the defined business case.

  4. There was potential to reduce current CAPEX/OPEX spending by developing and implementing more robust Strategic Procurement practices. 

  5. CAPEX/OPEX sourcing strategies:
    OPEX spend is distributed across 29 summary spend categories, with 90+% in the top 14 categories.
    CAPEX spend is distributed across 29 summary of spend categories, with 87% in the top 13 categories.

  6. Significant opportunity to reduce the estimated current inventory (no accurate or reliable records)

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IMPLEMENTATION

We focused on three areas within Supply Chain Management

  • Prioritized and executed categories for sourcing.
  • Consolidated vendors in major spend categories.
  • Defined and executed top priority sourcing waves.
  • Consolidated invoice signing authority.
  • Improved process and controls for adding new vendors.
  • Defined more granular savings targets with plans and resources to achieve them.
  • Streamlined business processes and inventory tracking.
  • Reduced uninstalled inventory costs (carrying, storage, transactional).
  • Improved material transfer process and visibility.
  • Streamlined and consolidated spend category accounts, both CAPEX and OPEX.
  • Improved ability to aggregate and manage spending across categories.
  • Enhanced tools for managing and controlling spend.
RESULTS

All delivered at a 8:1 client Return on Investment

Reduction of total OPEX Supply Chain Management spend
0 %
Reduction in cost of Field Logistics
0 %
Reduction in overall field vendor base
0 %
Reduction in field inventory (parts/spares)
0 %

The biggest difference now is that we have provided visibility of every penny of spend right down to each field operator, allowing them to manage their routes like it was their own business.

Asset Manager

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