Global Procurement
SITUATION
Procurement organization at a global automotive supplier had significant process and system deficiencies within a fragmented, decentralized organization.
DRIVER GOAL
- Deliver Procurement cost savings of $9.1 million through reduction in purchase costs and process improvements.
- Realign the Procurement/Strategic Sourcing organization.
RESULT
- Identified cost reductions totaling $10 million in annualized savings with potential of $54 million targeted for 2010.
- Delivered additional $20 million in working capital improvements.
Case Study
Create World Class Procurement
Issue
A high-level assessment of the Procurement organization at this global supplier to automotive and industrial industries identified significant process and system deficiencies including a fragmented, siloed, non-performing decentralized organization. The Highland Group was engaged to deliver rapid and measurable financial results to be realized through the implementation of improvements to supplier and contract management, strategic sourcing, negotiating skills and the processes and technology used to manage and measure the effectiveness of the Procurement function.
Highland Approach
The Highland Group focused its implementation strategy on addressing the client’s critical needs while quickly becoming self-funding. Before launching into implementation, the team conducted a thorough organizational assessment of current skills capabilities, including past work experience, tenure in current position, degrees and certificates, and succession desires. The data collected from the high-level assessment of the Procurement function along with the results of the skills assessment enabled the team to create a detailed implementation roadmap to achieve the organization’s Driver Goals.
Actions Taken
- Conducted a series of global organizational redesign sessions to design the go-forward functionality breaking the traditional barriers and silos that impacted performance, including the recruitment of new Procurement professionals.
- Developed a strategic alliance with and management process for multiple 3rd party technology suppliers to ensure manageability and sustainability of the reengineered business processes.
- Formed a new banking relationship for the P-Card solution that also supported the Procurement technology solution.
- Provided direct, hands-on sourcing leadership in over 40 negotiations.
- Implemented a comprehensive multi-media communication process to support the change process.
