Sourcing and Training

The client.

An international product testing company.

The business issue.

This company faced increasing price competition in a near-monopoly market, resulting in intense pressure on costs. The company's recently-reorganized procurement group was challenged by executive leadership to drive additional cost savings for the organization.

The solution.

Working with the director of procurement, Claro Group professionals conducted a three-week opportunity assessment to identify and prioritize potential savings opportunities across the company's spend base.

The project team created a business case outlining potential short-term savings of $3-$6 million in the areas of:

• Office supplies
• Travel
• Paper
• Courier
• Temporary labor and facilities management

Joint company/consultant teams targeted these areas of opportunity by utilizing a variety of techniques, including incumbent negotiations, requests for proposal, online reverse auctions and in- versus outsourcing analyses.

In addition, the team identified gaps in the company's procurement skill set and designed a training program to support ongoing savings capture and sustainability. The training program covered the end-to-end sourcing process, including spend analysis, negotiation preparation and savings tracking.

The results.

This approach enabled the company realize savings of $5-$7 million on an annual basis. In addition, it established savings tracking tools that enabled the company to measure realized savings. And, the new training program equipped the procurement team to target additional spend categories after the project was completed.