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Audit of the Procurement / Supply chain function
Audit of the Procurement / Supply chain function
To value the level of procurement efficiency
To spot savings opportunities, to design an action plan for delivery
Timeline: ~4 weeks per category of spend
Greenfield to Procurement excellence
Greenfield to Procurement excellence
Category management
Organise spend by category
Group supplies to a limited number of suppliers
Implement preferred suppliers framework with Master Supply Agreements
Reduce number of suppliers
Implement long term partnerships with preferred suppliers
80-20 refocus
Reduce time spent with suppliers to focus on strategic suppliers
Implement a long term sourcing strategy in collaboration with operations, R&D, strategy and sales
Launch RFIs, RFQs, and negotiate prices, volumes, and reassign suppliers
Contracts negotiation
Negotiate contracts, and deliver cost savings hitting the bottom line (EBITDA margin)
Timeline
Plan 3 month per category of spend (up to £50 million spend)
Recalibration of the Procurement Function
Recalibration of the Procurement Function
Procurement Governance to stop maverick spending
# of suppliers under contracts
spend amount under contract coverage
total # of suppliers / spend by supplier
Risk coverage for strategic supplies (RAG status)
Review organization, and escalation points to validate new spend (direct materials) and new expense (indirect procurement)
Governance through ERP systems
Implementation / review of P-Card
Implementation of ERP: from SAP S4 hana to iValua, Coupa or Jaegger -> lead transition while ensuring main data is transferred securely
Procurement General Terms and Conditions
Rewrite the T&Cs to match to best standards with latest regulations
Change payment terms with suppliers to gain cash
Costs reduction initiative
Costs reduction initiative
Launch RFIs, and RFQs to reduce cost - Two cases:
Category not negotiated for over 5 years
Will to move to new suppliers
Support supplier transition and SKU validation process
Product redesign to cost, in collaboration with engineering
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