CASE STUDIES
A $20 billion information technology company with an annual baseline spend of $1 billion needed help with fragmented sourcing as a result of recent mergers and acquisitions. The business structure changes had created higher volumes and more decentralization of their sourcing programs. We collaborated with the client to develop a strategy that combined the client’s enormous purchasing power with its outsourcing customers, saving an average of $50 million per year.
A $2.4 billion telecom company lacked a formal sourcing process, opting to solicit equipment procurement and contracting on the internet. This company’s annual baseline spend was $8.5 million. Our analysis of the company’s supply market revealed that manufacturing costs for key components had actually declined 50% annually over a two-year period. Our program saved the company $3.4 million.
Deregulation of the utility industry left an established $1 billion Midwestern gas and electric utility company stuck in the tar pits. Though resistant to change, our data-driven sourcing approach and fact-based negotiating strategy helped the company transform itself, saving more than a quarter of million dollars in the process.
A $700 million consumer food and beverage company was lost at sea due a perfect storm of high supplier fragmentation, a lack of a category-level strategic sourcing and poor negotiating skills. Our recommended strategy of institutionalizing a portfolio of formal sourcing and negotiating strategies that are tailored to the characteristics of specific categories saved the company $13.2 million annually.
Due to maverick spending habits, decentralized execution and a lack of skilled procurement professionals, a $1.2 billion telecom service provider with a spend baseline of $350 million was hemorrhaging millions. We reorganized the company’s procurement system, introducing automated programs for tactical purchasing and strategic sourcing for contracting. Our redesign resulted in an annual savings of $13.8 million.
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