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Letter from America – December 2016

Words: Alex Klein
It’s seven months since I moved to New York to lead Efficio’s expansion in the North American market, and what an interesting end to the year it has been. Very few could have predicted that we would be facing a completely new style of Government on this side of the Atlantic in 2017.

Being at the “sharp end” I can tell you that the American market for management consulting is a tough one…and one where as a European firm, you’d better bring something special to the table, or else leave the room. We have found that our passport into business here is our unparalleled experience in strategic sourcing, particularly in direct materials and Capex spends. While the US Private Equity houses are well served with consultants that deal with the classic “indirect” spend categories – office supplies, temp labour, small parcel and rental cars for example - Efficio has a clear point of difference. We are focused on the much larger direct materials and services spend and this seems to resonate well with Private Equity!

Our passport into business here is our unparalleled experience in strategic sourcing, particularly in direct materials and Capex spends.

Mirrors between the USA and the UK

The prospect of a Trump administration is looming large on the horizon. He is all over the media every day with opinions on pretty much everything. Looking through the chatter, for those of us working in procurement there are a couple of key things to watch.  First the question of whether the tide is turning against outsourcing and offshoring. Traditionally a mainstay of procurement savings for many years, there was a strong emphasis during the presidential campaign on keeping American jobs in America. If policy follows rhetoric, this will mean corporate USA will think twice about sending jobs to lower cost countries and a reformulation of the supply chain to focus on the domestic market will be required.

There’s a mirror with Europe here. We are well placed to advise clients in the United States having seen ‘nearshoring’ play out in the UK and Europe over recent years, and it is coming into even sharper focus following the EU referendum. It will be interesting to see how this trend develops in the US over the next year.

A reformulation of the supply chain to focus on the domestic market will be required.

Our client experience

Our strong private equity credentials mean we recently signed significant new projects with a Private Equity-owned manufacturing group in Denver and with a Canadian insurer, for whom we have just delivered a successful claims sourcing programme.

A Houston-based chemicals distributor has joined the ranks of our American clients. We’re working with the company’s supply chain team to fundamentally change the way it buys chemicals, all the while absorbing the procurement spends of a number of new acquisitions.

Mergers and acquisitions are again the theme at another new client, this time in Atlanta. A merger of two high tech manufacturing companies presents a procurement opportunity which Efficio has been selected to help execute. As usual, the entire third party spend is in scope. 

We’re set to surpass our revenue targets for the year.

Our progress

We have expanded our team of consultants operating in America now, and we’re set to surpass our revenue targets for the year. We’ve moved offices from our small serviced office in Rockefeller Center and are now housed at a larger, more open plan office on Third Avenue. Marketing is progressing well, with five Procurement and Private Equity conferences under our belt so far this year. Our sales and marketing efforts redoubled from the end of November, when our new North American Business Development Director started work.

Watch this space!

 

If you would like more information about our work in the USA please contact Alex Klein using the links below.

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