Challenge
Our client, the largest European manufacturer, was trying to rationalise its product materials contractors. With several billion pounds worth of expenditure and over 300 contractors to manage, the state of the relationship was very tactical between procurement And the supply base. As most of the products were unique, prices were negotiated periodically with little understanding of cost drivers and value for money. At the same time, perceived value of the contractors was based on Business Stakeholders emotional preferences.
Curzon's approach
We launched a major review program aiming at maximising the value received from contractors while optimising prices and achieving cost savings.
We engaged, early on, with all of our client’s Business Units and onboarded them through the transformation journey., We ensured Business Stakeholders were not just kept informed but part of the solution.
Value
- Reviewed and implemented improved SLA’s
- Developed Unique contractor value assessment technique where Quality, level of services, innovation, sustainability where all factored-in a comparative way
- Incentivised and rewarded suppliers bringing innovation and helping with sustainability strategy
Price-wise
- Brought cost transparency through costing formulas
- Implemented advanced negotiation techniques to optimise pricing
- Conducted global contractor market review for all types of materials
- Created competitions in the monopolistic areas
- Went to market in areas dominated by powerful historic contractors
- Proactively collaborated with key suppliers to implement efficiencies & improvements
Impact
As we stayed well beyond the sourcing process we ensured the following benefits materialised.:
- Stakeholders collaboration and procurement seen as key partner to the business
- Multi-million £ Cost savings achieved over 3 years in a row
- Increased of level of services, delivery performance and products quality
- Full support to client’s sustainability objective
