Services Industry

AGGRESSIVE SOURCING ACHEIVES SIGNIFICANT SAVINGS FOR ENVIRONTMENTAL SERVICES PROVIDER

Leveraging the combination of category market intelligence and a bona—fide strategic sourcing methodology make for a results-producing model.

Profile

Client present in more than 550 communities across North America, leveraging a complex relationship between water, waste and energy to solve environmental challenges and help customers reach their goals.

Objective

This project was to launch several strategic sourcing and tail spend activities within a scope of roughly 15 Direct and Indirect industrial type categories and 1000’s of current suppliers. The expected deliverables were to deliver at minimum 10% savings, to develop the corresponding strategic sourcing plans and to train the procurement team on strategic sourcing methodologies.

Challenges

The collection of spend data was especially difficult without any existing P2P or Spend Analytics tools. The extremely fragmented supplier base was a challenge to build an external and internal spend overview across the different information systems. Last, the lack of strategic supplier or category playbooks obliged the team to start with basic data collection (client & supplier data), aggregation of spend by main categories and suppliers to build a step by step executable action plan.

Impact

As mentioned, the overall approach was to:
• address the spend analysis,
• to define executable addressable sourcing waves,
• to deliver savings and to train the team on strategic sourcing processes.

The financial results were above target with 16% savings across the different categories.

The client team was enthusiastic about the training programs and to learn about best in class strategic sourcing practices. All addressed categories had a defined sustainable action plan with a new supplier network.