CASE STUDY:
Creating a New Sourcing and Procurement Organization, Evolving the Team, and Centralization
The Challenge:
Ad Hoc and Decentralized Procurement
Procurement resources we scattered across the organization. Each employee sourced and purchased products and services based on their area without a centralized organization. This led to multiple agreements, order forms, varied terms and conditions with the same supplier or purchase of same or like products services.
Creating a centralized Procurement team would be challenge within the company.
The Strategy:
Build a strong Sourcing and Procurement Organization to Service Stakeholders
A review of the Procurement environment revealed that several departments were sourcing and/or purchasing products and services without a structured approach. Developing a Procurement organization within established ad hoc process and leadership would require several key elements. We needed to create a process and guidelines that outlined how and when sourcing and purchasing should be implemented. Additionally, alignment of current resources into a single organization would be critical for success.
The initial team was created with processes and guidelines to support the entire organization. The stakeholders were engaged at every step ensure bi-directional communications would be maintained and decisions would be made collaborative and to meet expectations. Once we these critical steps were implemented, the next phase required financial and risk mitigation reporting, continue to grow FTEs to meet to continued demands, and standardize agreements.
The Results:
Billions of Dollars of Cost Savings and Risk Mitigation
The consolidation of resources, agreement standardization, financial reporting, stakeholder alignment, and a great team culture resulted in billions of savings over 13 years. Additionally, based on the success, the team expanded to include Procurement for each division.