Third party spend reduction across Europe
A major UK established manufacturer of heavy engineering units including the aftermarket fulfilment, a global business with over $1bn turnover.
To reduce the direct materials 3rd party spend across three of their key manufacturing sites in Europe.
In the past, there had been no co-ordinated collaboration across the plants and existing teams had been working to satisfy their own business needs. The common data across common parts and suppliers was not available and structured differently by country. There was a critical need to develop a comprehensive business case and cash flow analysis for the organisation to take forward with a detailed implementation plan and key risks identified.
We brought in a small team of spend analysts and direct category SME’s firstly to set up a spend analytics B.I. dashboard for this business to understand the high levels of spend and specific suppliers that were currently providing raw materials, products and services to support each factory. Using this data, our SME intelligence and our benchmarking data we provided a detailed opportunity assessment and business case, including ROI, for the delivery of improved value from their direct materials suppliers over 3 month years. The business case included detailed sub-category opportunity assessments with short/medium and long term initiatives for specific direct materials spend areas and key suppliers.
We developed a full plan for the business with over 60 separate direct materials spend savings projects over the 3 years and impact analyses into the overall global category strategies. The business case was approved, and the program has been implemented within a new delivery structure across the business. The spend B.I. solution is being used by the customer as an ongoing enabling tool to support the delivery.
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