Global Strategic Sourcing procurement drive for Cognis
Efficio helped Cognis to execute a multi-wave Strategic Sourcing program across the globe, while transforming the capability of the Procurement team through full involvement in the project and formal training.
The program achieved €68m of annualized savings across three waves of sourcing; Efficio's support tapered over two years so that by the final wave of sourcing, the Cognis in-house team was fully self-sufficient.
Cognis is a leading global supplier of innovative specialty chemicals and nutritional ingredients, with a particular focus on the areas of wellness and sustainability. It employs around 6,000 people in 30 countries across Europe, North America, South America and Asia. With global revenues of €3bn, Cognis has an external spend of more than €2bn.
Cognis recently reorganized its worldwide Procurement function to create a central team with staff in all major sites operating in a category management structure. This created a challenge as the processes, policies and tools being used were not updated to suit the new organization, and there was poor coordination between Procurement personnel worldwide. Added to this, Cognis was facing major cost pressures in the Specialty Chemicals market, which was putting extra demand on Procurement to generate cost savings.
In response, senior management launched a program to achieve maximum efficiency throughout the company’s global Procurement operations. Efficio was engaged to help drive a global Procurement Transformation program. This involved global Strategic Sourcing projects across the entire spend base over three waves, as well as significant coaching of the client team, leading to the adoption of a consistent Strategic Sourcing process on a global basis.
An assessment of the company’s global Procurement operations and spend identified savings opportunities through the introduction of global Strategic Sourcing. A program of major changes in the company’s approach to procurement was devised together with a work plan to put the initiatives into effect. Using our deep market expertise and knowledge, Efficio helped the client team to successfully:
- Execute a global Strategic Sourcing program, across more than 35 direct and indirect spend categories
- Roll out new processes gradually to teams managing 60 ongoing global sourcing projects
- Carry out a formal, tailored training program based on Efficio’s Strategic Sourcing methodology coupled with on-the-job training so that it could be deployed to full effect in the future
- Introduce a robust four-stage reporting process to monitor category progress, resolve issues, and track savings and compliance
Efficio worked with us over a two year period to identify and deliver significant procurement savings on a global basis and did an outstanding job, working closely with our Procurement and Operations teams to deliver savings that are contributing to our bottom line.
Efficio’s engagement helped deliver a number of significant benefits for Cognis, including:
- €15m of savings produced immediately by implementing of Efficio’s Strategic Sourcing methodology across initial categories in the first wave
- €35m of savings in the second wave – €5m more than the initially identified target
- A further €18m of savings delivered in the third wave, which Cognis carried out independently
- Full training provided to all Procurement staff to transfer knowledge and tools
Efficio’s support was tapered over the three waves of Strategic Sourcing – the first wave was Efficio-led (“show and tell”), the second wave put Cognis personnel into fuller roles, and the third wave was self-delivered with minimal program management provided by Efficio. This approach of gradually weaning off support worked very well to ensure a full, smooth skills transfer to the client team.