Efficio's strategic sourcing services provide a rigorous and disciplined process for category and commodity organization which drives cost savings and improves supplier value.
Cost reduction programs need an organization-wide, strategic focus to be successful and sustainable.
Challenges with strategic sourcing management can be due to:
- Procurement being fragmented across businesses, operations and locations
- Mergers and acquisitions that have not been consolidated in terms of procurement
- Procurement itself being viewed as a transactional process that has little engagement with the business and functional stakeholders
- Immature procurement functions in terms of development and in the development of its staff and processes
How strategic sourcing service work
We deploy a structured methodology, starting with establishing category cost baselines, identifying the total cost breakdown, and analyzing the relevant supplier markets. From this we recommend appropriate sourcing strategies for the category.
Our team then produces RFP documentation and tender contracts and the approaches and commercial models they embody. We look at the appropriate methodologies for assessing quotations and tenders, at the negotiation strategies to be employed, and the tools and materials required to support these.
We will draw up implementation plans for new strategies to ensure your success. Efficio’s extensive experience across categories and sectors provides the foundation to all sourcing strategies. These use appropriate advanced techniques and levers suitable for direct and indirect spend, including:
- Specification optimization
- Demand management
- Low-cost country sourcing
We provide you with ongoing support until negotiations and deals are complete, while continuously re-evaluating purchasing activity and performance against the ever-changing business environment.
This structured approach delivers measurable savings that can be traced through to the bottom line. Because we emphasize total cost of ownership over mere supplier price, these savings are real and sustainable, and are complementary to achieving the desired levels of quality and service.
Efficio’s strategic sourcing management projects improve procurement integration with other business teams and stakeholders. Our service takes what is essentially an administrative cost centre, and turns it into a better, creative and value-adding partner to other parts of the organization - a more strategic procurement approach.
We empower cross-functional teams to ensure knowledge transfer and training, while involving other stakeholders deeply and constructively at all stages in the process. Efficio’s ability to perform deep, detailed analytics across the company-wide spend means that both strategies and supplier negotiations are driven by data, facts and knowledge.
Our approach can be applied across direct and indirect spend, capital and project expenditure, and can be extended across geographical and business unit boundaries. We applied strategic sourcing successfully to the engineering services spend of four of Ford of Europe’s then brands across six European areas.
For National Grid we addressed 18 categories and developed a single global category management toolkit. Thirty procurement managers were coached in rigorous sourcing execution and we developed a comprehensive training program for over 200 other procurement employees.
At waste contractor Shanks, operating different services across three countries and with a $581.6 million spend managed on a country basis, we were able to select different strategies appropriate to country and category.
For example, Transport and Temporary Labor being country-specific to be sourced locally, while for Fleet we took a European-wide view and put in place framework agreements with key chassis and body manufacturers. For construction, the strategies had to recognize the particular characteristics of UK public sector contracts. Contrasting strategies, but all encompassed by a single, group-wide, methodology.