$1.5B consumer products company fortifies procurement infrastructure to reduce costs and accelerate merger synergies
With plans to acquire another company, this consumer products leader needed to ensure that it realized synergies form the acquisition even as it continued to identify new ways to fund growth. To accomplish these objectives the company decided to leverage a Comprehensive Procurement Solution to optimize spending areas including MRO, marketing, IT, corporate services, travel, direct materials, capital and facilities. To date, the client has realized tens of millions in savings and is deriving significantly more value from their strategic partners
Reduced consumer spending, escalating commodity costs, and a recent acquisition put more pressure than ever on the company to achieve significant, sustainable cost savings. Having already made cuts in traditional areas, the company turned to indirect spend as a potential source of untapped savings.
The company had a procurement organization that was very adept at managing direct materials procurement. However, their indirect procurement activities were under resourced. Driving savings from indirect categories would require a transformational, comprehensive spend management solution that would enable them to penetrate sacred areas of spending like marketing and IT, accelerate contracting cycle-times, ensure that savings were realized savings, and drive continuous cost innovation.
The company chose ProcurianSM based on our proven ability to help companies transform indirect procurement and deliver maximum realize savings. By partnering with us, the client gained access to our Specialized Procurement Infrastructure™, which infuses teams of dedicated category experts, real-time market intelligence and proprietary technology into a comprehensive spend management process. This level of specialization and supply market intelligence would be essential to gaining the trust of diverse budget holders. Procurian was specifically engaged to:
- Help Procurement optimize and fully manage hundreds of millions in spend in categories including MRO, marketing, IT, corporate services, travel, direct materials, capital and facilities
- Support an integrated set of activities, including Category Planning, Sourcing, Implementation, Contract Management, Transaction Management, Supplier Relationship Management, Continuous Cost Innovation, and Information Management and Reporting
- Leverage the client’s existing SAP platform while bringing proprietary sourcing, category management, workflow and analysis tools – Radix ™ and SavingsLink™
Leveraging Procurian’s Specialized Procurement Infrastructure, the client has significantly expanded the spend that Procurement actively manages and has accelerated tens of millions in verified acquisition synergies. Additional program highlights include:
- Deep stakeholder relationship with Marketing and Engineering (for capital purchases) which has opened doors for successful projects in key spend areas, including media and advertising
- Achieved cost savings of 13.5% in logistics across both of the company’s dry and refrigerated operating segments
- Integrated and optimized logistics networking including new acquisition while also delivering on-going cost savings of over $7MM through better management of network demand during peak seasons – without increasing inventory costs
Back to success stories list