Transforming the supply chain of Survitec Group
Efficio helped Survitec Group, a market-leading manufacturer of marine, defence and aerospace survival technology, to implement a Procurement Improvement Program. This introduced a structural change to the way the Group managed its supply chain, resulting in significant bottom line cost reductions.
Today, Survitec Group has a high performing central Procurement team which works with other functions across the company to deliver results year-on-year.
Survitec Group commands market-leading positions worldwide in marine, defense and aerospace survival technology. The company is a global player with six manufacturing sites and 12 service and distribution centers around the world. The Group has grown quickly in the last few years through a series of acquisitions around the globe, and now operates in 11 countries.
Despite operating in common fields, Survitec Group had not integrated its newly acquired companies into its own organizational structure. Because of this, the acquired units had maintained significant operational autonomy, which was particularly evident in Procurement, where there was little collaboration between the sites or across functions. The Group launched a Procurement Improvement Program together with a Manufacturing Footprint Optimization program. Efficio was engaged to assist with integrating and building cooperation between the sites, strategically sourcing a wide range of categories, and supporting the relocation of manufacturing operations to the Far East.
The objective of the Procurement Improvement Program was to introduce a structural change in the way the Group managed its supply chain while delivering significant bottom line savings to the business.
Survitec and Efficio agreed to strategically source a set of procurement categories utilizing improved cross-site coordination and volume leverage, and employing an improved Strategic Sourcing process that addresses all value levers, including low cost country sourcing and the development and adoption of fit for purpose and harmonized specifications. Using our deep procurement expertise and knowledge, Efficio worked with the Survitec team to successfully:
- Drive a structured Strategic Sourcing program across direct and indirect spend globally
- Refresh the supply base, overcoming obstacles implied by client’s strict qualification process for new products and/or suppliers
- Apply a broad set of sourcing strategies to the key direct material categories, including the use of competitive tenders, sourcing from low cost countries, rationalized and harmonized specifications, and long term indexed contracts
- Assist category teams in overcoming difficulties related to the operational independence and cultural diversity of the sites and functions
- Provide additional support to the Technical and Quality functions, whose cooperation with Global Procurement was critical
The processes introduced fostered a major cultural change in the organization. The approach to the introduction of new products and suppliers has proven to be effective and is continuously able to deliver strong results. Global Procurement is now on target to deliver an additional $3.58m annualized savings for this year and we continue to focus on the introduction of new suppliers based on a very robust, cross-functional qualification process.
Efficio’s engagement helped deliver a number of significant benefits for Survitec Group, including:
- Achieved 10% cost reduction on the addressed spend
- Established a central Procurement function with new personnel
- Transferred the required tools and skills to the new team, including formal Strategic Sourcing training and on-the-job coaching
- Improved relationships between Global Procurement and the organization