Sourcing & procurement

Case Study - Global Sourcing

A global defence systems player was experiencing poor inbound delivery performance and excessive price rises on its bought out content. Our brief was to overhaul the supply chain architecture to reduce and stabilise costs and significantly improve delivery performance.

We began by assessing opportunities for cost reduction by:

• Analysing current and future spend – part families, volumes, pricing history, number of suppliers
• Assessing the supply market complexity and competitiveness
• Identifying potential for cost reduction – spend leverage, opportunities through collaboration or specification/design changes, recent initiatives, process and technology improvements
• Assessing the effectiveness of current sourcing initiatives
• Prioritising improvements by value to the business and ease of implementation
• Preparing a Sourcing Plan
  

We led phase 1 of the Sourcing Plan - a balanced mix of tactical and strategic initiatives designed to achieve improvements over a two year period. In this phase, some improvements were achieved almost immediately e.g. a cost reduction of over 50% was achieved within 2 months for one product category through a combination of technology change and contract management.

We also identified that 70% of all late deliveries were due to internal inefficiencies within the client’s own organisation. Root cause analysis resulted in implementation of a programme that considerably improved inbound delivery. Some elements included in this programme:

• Process redesign/enhancement
• Process compliance - audits, education and training programme
• New KPIs designed to drive compliant behaviour
• Data integrity – data cleansing and data maintenance.
  

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