A global confectionary company with HQ in the US has embarked on a mission to reduce cost and improve strategic supplier relationships.  While making strong progress in most areas, Brand and Marketing has been a challenge to engage due to their perception that Procurement lacks subject matter expertise.  In order to address this perceived shortcoming, the Global Director of Procurement turned to OnDemand Resources for help to provide a Marketing Spend Sourcing Expert who could lead projects across the Brand and Marketing Category.  OnDemand engaged a former client and current independent consultant / member of the OnDemand Professional Network Michelle Griffith to help the company develop and execute strategic sourcing relationships with their Marketing partners. SITUATION OVERVIEW The Marketing Category was challenging – Client had a large portfolio of brands (15+) and a large portfolio of agency types on the roster (15+) – all at different life cycle stages and with significantly different budgets.  Additionally, the Client was transitioning a new piece of business, bringing in not only new brands but also new staff members that were not accustomed to their policies and practices. Single sourcing was happening throughout the organization as the procurement function was relatively new to most.  Michelle started to engage with Brand and Marketing on smaller projects to build momentum – she understood that building trust and relationships is critical to procurement success.   As time progressed, she was able to demonstrate significant procurement value and was tasked to lead larger and more complex sourcing engagements.  Her success in building substantial procurement momentum helped Brand and Marketing deliver significant and sustained results. The Client was so... read more

Digitize Source-To-Pay For Improved Efficiency, Visibility and Accuracy

Digitization of strategic procurement processes and capabilities has been the biggest advance in the world of procurement over the past 10 years. This enablement allows companies and their suppliers to be more efficient, effective and accurate and hence significantly adds to increasing value across the extended enterprise. Read how a global oil services company went about improving the digitization of the source-to-pay process after a merger. SITUATION OVERVIEW When the CFO heard the procurement team explain the importance of a software portal for suppliers to register and manage their banking and payment information, he had an “ah-ha” moment.  Realizing a similar need for the company to register and use their customers supplier portals to ensure proper payment through the order-to-cash process, he understood the efficiency of the same process for a supplier portal to manage the company’s suppliers.  This “ah-ha” moment provided the procurement team with a way to align with the CFO and other executives to continue developing their source-to-pay digital strategy.  As a result of a recently merged global oil services company with over $3 billion in annual revenue, the procurement team needed to implement a digital system to support the purchasing requirements across multiple business units and ERP systems.  This need was driven by two factors.  Frist, because of the merger, prior procurement software licenses expired and second, the newly merged entity started to experience significant operational problems processing supplier payments.  These factors had a cascading impact on the central procurement’s team capability to manage supplier relationships necessary to meet delivery and cost reduction goals.  Given these factors, executives including the CFO, COO, CIO and VP... read more

Employee Benefits Sourcing Delivers Savings While Improving Service Levels

SITUATION OVERVIEW A leading global transport company anticipated generating significant cost savings and scale efficiencies as the direct result of a merger. A majority of the cost savings were expected to come from a North America-wide strategic sourcing initiative, within which Employee Benefits was targeted as a key savings area. The company lacked deep domain expertise in sourcing employee benefits – given the potential for significant savings, but also the risk involved in sourcing this category, the company turned to OnDemand Resources to provide a strategic sourcing expert with deep experience sourcing the employee benefits category. Their desire was to deliver savings while maintaining benefits levels, and also transfer category knowledge onto their in-house team for on-going effective category management. OnDemand offered several consultants with the desired background, and the company chose a member of our OnDemand Professional Network to lead and implement the project. SOLUTION OnDemand consultant provided hands-on project leadership for cross-functional teams in understanding and defining requirements and managing the transition throughout the company. He followed a sourcing methodology that included spend analysis and requirements gathering, especially focused on understanding the current benefits levels, market research and sourcing strategy development, and contract negotiation and implementation. The consultant worked closely with internal resources to develop and implement an e-auction process for each product within Employee Benefits category in order to maximize marketplace competition and savings while maintaining – if not improving – each segment of the employee benefit program. RESULTS The results of the process far exceeded our expectations, especially in light of the very short timeframeDirector, Indirect Sourcing As a result of OnDemand consultant’s leadership, the... read more

Over $5MM Savings Through Strategically Sourcing Legal Spend – Case Study

Managing professional services spend is always a challenge – often vendors have deep relationships with key stakeholders within a company that can lead to suboptimal engagement of the right external capabilities and diminished value. To be successful strategic sourcing must use data and a fact-based approach in close collaboration with key internal stakeholders to deliver the optimal results – here is an example of F500 company Legal Sourcing exercise that delivered significant savings for the organization.  SITUATION  The Corporate Legal department had over 200 law+ firms servicing their various corporate needs. Numerous firms were one-time use only, many were engaged for one case only, and others were routinely given new cases due to an existing relationship with the firm or one of its lawyers, and not based on their core capabilities or the best value provided.  The company did not have formalized guidelines or procedures in places to manage legal spend – each law firm was managed individually, or even worse, each case was managed differently. There were no negotiated rates in place for external counsel.  An e-billing system was in place, but was used poorly and often not at all. A new General Counsel joined the Company with one of key goals of applying cost management practices to law firms and external services as part of Company’s overall profitability drive.  He was supported by the Category Lead, Jo Ellen Hatfield, a member of the OnDemand Professional Network. APPROACH    First, to gain an understanding of how firms are selected and assigned a case, Jo Ellen met with Legal team leaders of each practice area to understand their key requirements, and their process for selecting, engagement and... read more

Pandemic Spurs P2P Improvements For Greater Efficiency and Effectiveness

A global Cruise Line company with multiple brands faced with limited resources post-pandemic was looking to improve the efficiency and effectiveness of their P2P processes in preparation for a full return to service.   They hired OnDemand Professional Network member Alvin Wong to help them with two challenges:  1) to analyze, assess root-causes, and help address a backlog of unpaid supplier invoices, and 2) to develop a P2P roadmap to improve the process. SITUATION OVERVIEW During the pandemic, an unintentional backlog of past-due invoices, changes in leadership, and the reduction of resources resulted in an urgent need for help to address issues and establish a “roadmap” to improve the organization’s P2P processes. Although the predominant number of invoices were paid on time, there were hundreds of invoices past due over 60 days, with many over 120 days, the company was at risk of being cut-off by suppliers.  The invoices were not past-due for a lack of company funds, but rather for validation and confirmation by purchasers before payment.  Something was failing in their P2P process and any findings were to be incorporated into a “roadmap” for a recommended P2P modernization plan. APPROACH Working with Finance, Sourcing, Technical Operations, and Supply Chain Procurement, we conducted a series of past-due invoice reviews, stakeholder interviews, and process and system mappings.  Using the findings, we analyzed root-causes of the past-due invoice problems, implemented changes, and identified various opportunities to incorporate into a “roadmap” to improve P2P processes and systems. CRITICAL SUCCESS FACTORS Fact-Based Data-Driven Analysis and Findings:  Commit the time to smartly collect and analyze data first to avoid wasted efforts solutioning the wrong... read more

Cost Reduction Through Near Shore Manufacturing Optimization and Low Cost Country Sourcing

A major consumer products US company aimed to significantly reduce COGS through their OPEX manufacturing strategic plan.  The company understood that in order to significantly reduce COGS, they needed to diversify their manufacturing footprint and simultaneously optimize the Product Portfolio, and Low-Cost Procurement and Low-Cost Manufacturing Practices. SITUATION OVERVIEW The company had a number of plants across different regions in the US but no international plants.  The current manufacturing footprint could not sustain the market pressure caused by the lower prices of competitors with plants in Asia and Latin America despite all the cost reduction efforts.  Driven by the new aggressive cost reduction mandate Senior Management decided to start up a manufacturing plant in Mexico to take advantage of the low-cost manufacturing labor in the country as a key strategic initiative to reduce COGS and improve EBITDA. The company hired OnDemand Professional Network member Juan-Luis Munoz as the VP/GM of International Operations to lead this strategic endeavor. APPROACH The team first performed an assessment of the OPEX Current State, Product Portfolio, Manufacturing Network, OTC Lead Times (Order-To-Cash) and top spending accounts. The company graded poorly along several high-level OPEX critical elements:  Fragmented and isolated improvement effortsLack of manufacturing standardization and best practice deployment systemPeople engagement, motivation and empowermentStructural misalignmentUnstandardized KPI measurement and reportingBusiness macro flows not properly connectedObsolete manufacturing methodologies Understanding the current state was crucial in planning a successful manufacturing plant in another country.  Among other things, the team uncovered significant manufacturing practices being conducted with the use of “tribal knowledge” only. When some level of standardization of processes was found, this was executed by multiple individuals in different... read more