Project Description

The transformation met the CEO’s strategic imperatives by:

Key challenges encountered were:

Sustaining cultural change
Re-engineering the financial budgeting process by indelibly embedding targets into each line of business

The company had exhausted cost efficiency restructuring. This had primarily been aimed at reducing the number of employees via reorganisations, outsourcing and offshoring
The company had not successfully mined its $5Bn third party cost structure to improve efficiency and effectiveness.
Procurement and Supply Chain activities were severely fragmented and decentralised – there was no focused strategy or leadership direction
The CEO requested the formulation of a strategy that would transform Procurement and the Supply Chain, with two overarching guiding principles:

The team responded to this challenge by responding to the creation of a centre-led Procurement and Supply Chain Management structure, as it was deemed to be the best conduit to accelerate the strategy

Stakeholder belief and buy-in to the Category Management Waveplan
Out-of-the-box thinking to maximise value for money opportunities
Lack of early engagement into future external requirements by the business
Consistent application of category management
Lack of buy-in to value for money reporting by the business unit
Lack of senior leadership commitment
Lack of required competencies to deliver on the promise
Balance of roles and responsibility between the Supply Chain and operations
Resource ramp-up/down – to harvest the people investment
Lack of support or resources from the IT community, resulting in savings leakage
Business acceptance of new processes and technologies

Created a holistic strategy that utilised the best-in-class practices across multiple industry sectors, which were targeted to gain an in-depth understanding of the circa $5B spend
Clinically prioritised the savings opportunity by major category of expenditure and the strategic or non-strategic nature of the expenditure, as well as forecasted category spend trends
Phased the opportunities, based on best-in-class benchmarking savings potential and ease of capture, both from the perspective of complexity perspective and ease of implementation
Established a set of operational excellence key performance indicators, including but not limited to SLAs, Social Responsibility, Supplier
Relationship Management and Voice of the Customer
Leveraged a “fair process” change management approach to affect the requested cultural change
Developed a business case and ROI analysing timing, achievability and sensitivity analysis that identified tangible financial opportunities to deliver a $400+M EBIT / CAPEX savings
Utilised a best-in-class Category Management Framework, which had an evidence-based foundation to facilitate the establishment of enterprise-wide governance teams
CEO Health Check Reviews for all strategic categories of spend were established and best practice sharing facilitated to ensure tangible and measurable execution plans, as well as the robust measurement of improved value from a corporate perspective

Dashboards that utilised operational excellence principles and measures to monitor the tangible delivery of improved value, both financially and operationally
Rationalised the supplier base in specific strategic categories by over 90%, incorporating sustainable compliance process and technology improvements (e.g. vendor management system) to effectively manage policy, as well as rate and usage measures
An enterprise management process that ensured the strategic relationship management of key suppliers Delivered on its original promise of improved value of circa $550M and accelerated cultural change