The transformation successfully delivered by accelerating cultural change & making savings of circa $550M
Project Description
The transformation met the CEO’s strategic imperatives by:
  • Radically improving value for money and delivering the committed savings
  • Accelerating cultural change within the company
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:
    • Improving the value derived from third parties
    • Accelerating the required cultural change
  • 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

Challenges Encountered & Overcome

  • 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

Strategic Approach

  • 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
Project Details