Procurement Consulting

The Continual Re-evaluation and Improvement of Corporate Spending

The term "Strategic Sourcing" describes the continual re-evaluation and improvement of corporate spending. It is differentiated from traditional purchasing activities, which focus primarily on the acquisition of goods and services.

While purchasing is generally viewed as a "cost sink,” enterprise procurement can provide an economic value-added benefit. For our clients, the results of our engagements often create a compelling financial case for investing in a strategic sourcing organization.

A roadmap without risk

Our Procurement Consulting services provide a risk-free approach to establish a roadmap for this transformation. Unlike traditional hourly consulting, these activities augment our sourcing engagements and can be entirely funded through the associated contingency fees. These fees are not paid until you confirm the hard-dollar savings created by the associated pricing reductions.

The process

Engagements begin with an assessment of the current state and effectiveness of current procurement resources, processes, and automation. We then perform analytics on the current expenditure categories, including associated sourceable spend, transaction volumes, vendor relationships, product catalogs, and contract leakage.

Our Procurement Roadmap will provide actionable recommendations, based on your specific business requirements.
  • Organizational Alignment and Integration, including structure, integration, roles, responsibilities, and the associated ROI of each implementation phase.
  • Category Management, based on savings potential, required expertise, and the existing environment
  • Procurement workflow, including the requisition and procure to pay process, contract administration and vendor management, inventory and asset tracking, and required automation and integration to the existing systems.
  • Metrics and Measurement to ensure savings realization and validation, and to optimize organizational ROI.

The bottom line

As companies grow, so does the importance and bottom-line impact of its procurement activities. For a company with distributed procurement responsibilities, strategic sourcing will represent at least 10 percent year over year direct hard-dollar savings, while improving order management, supplier accountability, and inventory/demand management.

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Our Solution
Phased Implementation

How do you eat an Elephant?

One bite at a time.  You may have heard the expression before, which highlights the importance of unpacking large undertakings into manageable tasks. This approach is critical when implementing a robust procurement organization. Significant change management is involved, requiring the progressive development of sourcing expertise, infrastructure, and organizational buy-in.

Most companies find it difficult to digest the new structure if it is not phased in gradually.

In its early stages, a strategic sourcing group may have full responsibility over only the most commoditized shared services, while "unique" items continue to be managed by associated business units. Along with direct savings within shared spending categories, this hybrid model allows an initial focus on the procurement infrastructure: more effective order management, workflow, A/P integration, and automation support.

This foundation will increase visibility into enterprise spend, ensuring volumes are leveraged at the highest usage level. As the team's capabilities grow, so will the breadth of spend categories managed.

Over time, the sourcing organization is integrated with each department, leading enterprise-wide negotiations, continually monitoring costs, and providing supplier, inventory, and demand management. This centralized function enables increased focus by the business units on their core delivery functions.

A phased approach is the key to both accelerating the ROI and setting the table for future success. The company's appetite for enterprise sourcing will grow with each demonstrated benefit.  One bite at a time.