In an era of faster product cycles, global competition and increased risk of supply chain disruption, corporate leaders need to know how to use procurement often called supply management–as a competitive advantage. Purchasing and global sourcing can account for more than 50 percent of overall costs in many industries. ExpertActions works with clients to make procurement a strategic operation and realize huge bottom-line impact.

The companies use procurement as a source of competitive advantage but many organizations still under-manage this treasure chest because they lack a predefined, systematic playbook for reducing costs and identifying and implementing necessary improvements.

By taking a more comprehensive approach to what they buy and how they buy it, companies can reduce cost and free up cash. Full potential savings programs can average the procurement costs and as much as 40 percent for some categories. Typically, these are sustainable cost savings that can be followed by a further two to three percent cost reduction annually. Furthermore, strategic procurement efforts often result in shorter cycle times and supplier-led product innovations.

Despite the increasing recognition of procurement's importance, a recent ExpertActions survey found a growing gap between what corporate leaders expect and what their supply management teams are able to deliver.

ExpertActions's procurement consultants have worked on hundreds of engagements globally across all major industries, helping clients create world-class procurement organizations that can reduce their cost base, strengthen their supplier base and make the stick.

Our procurement experts work with companies through the diagnostics and implementation phases of the procurement program:

  • Diagnostic: Together with our clients, we begin by defining each organization's starting point and identifying the right enablers that will help the organization achieve full potential savings. To realize these savings, we develop a tailored action plan for each spend category. Some companies may find that the key enablers are the development of an optimal global procurement footprint and international sourcing capabilities, while the most effective tools for others may be dashboards, IT support systems or incentive structures.
  • Implementation: Next, we apply our proprietary tools, together with our approach to Assure, Amplify and Accelerate the savings. ExpertActions ensures the successful implementation of all purchasing initiatives and mitigates risk with change management support through our approach.

Our procurement diagnostic is based on three key elements:

1. Spend transparency: Creating a clear, complete picture of company-wide purchasing spend is a critical first step, whether it is managed directly by procurement or by other functions such as IT or HR. This "spend cube" includes a pragmatic overview of material group, supplier and structure by business unit.

2.  Full potential assessment: Together with the category managers and stakeholders our procurement consultants assess cost reduction potential by performing a bottom-up review of purchasing levers for all major categories of direct and indirect purchasing spend using ExpertActions's Purchasing Lever Analysis. The identified levers are translated into initiatives including estimated savings impact, milestones, activities and owners and are prioritized based on impact and ease of implementation.

3. Results sustainability: To ensure sustainability of results, we assess the gaps between the current performance of the purchasing organization and its full potential, including mandate and structure, processes, tools and capabilities. This builds the foundation for targeted improvement.