Client Success in Procurement

Business Problem

With good gross margins across all product lines, senior management was looking for ways to improve the operating margins to enhance profitability. The difficulty lay in finding a good place to start.  

Resolution

An analysis of the vendor master data revealed inconsistent payment terms and lack of vendor consolidation. A vendor management and procurement strategy was devised to reduce the number of vendors, negotiate consistently favorable terms, and simplify the procurement process for end users. The leverage with the smaller pool of vendors delivered a significant reduction in operating costs, thereby improving the operating margins.

Benefit

First year cost savings were over $5 million. The project was completed in 36 weeks, followed by ongoing operational activities for vendor management.

 

 

Success in procurement is mainly a result of careful selection and management of vendor partners. It pays to have a win-win mindset in this arena.