Procurement Process and Sourcing
The client.
A steel processing company.
The business issue.
This $2 billion steel processing company with 55 facilities in 11 countries turned
to Claro Group professionals for assistance in assessing and improving its corporate
purchasing function.
The solution.
Over the course of four months, Claro Group professionals reviewed the current state
of the company's purchasing function by assembling a joint client/consultant team
and benchmarking and identifying improvement opportunities. These opportunities
included costs savings in the areas of compliance monitoring, strategic sourcing
and purchasing process improvement.
During the subsequent eight months, team members provided project guidance and management
with respect to sourcing, procurement card and MRO compliance review projects. This
included:
- Providing project management guidance during purchasing process compliance review
of people, processes and technology.
- Providing change management guidance to encourage use of contracts by the business
units through the implementation of communication plans, executive sponsorship and
proven incremental cost savings.
- Creating and delivering steering committee presentations.
- Performing a strategic sourcing project in the packaging commodity area.
- Utilizing an eSourcing web tool to facilitate the request for proposal and negotiations
process.
- Developing implementation plans, including switching and supplier transition tasks
that facilitated the selection of new suppliers.
The results.
This approach enabled the company to:
- Increase compliance with and use of the MRO buying process by 100 percent.
- Deliver $5 million of savings over the life of the contracts.
- Roll-out procurement cards to five business units and more than 300 cardholders.
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