Nordic Capital has won Private Equity International’s (PEI) Excellence in Procurement Award for an innovative procurement program that delivered approximately €10 million in savings in 2016.
The Nordic Capital Procurement Optimisation (NCPO) model pools the sourcing requirements of portfolio companies and leverages their scale to deliver significantly enhanced procurement deals – similar to those enjoyed by large multinationals. Economies of scale can be achieved to meet common needs, for example flights or hotel accommodation, as well as industry-specific requirements. Additional benefits for participants include procurement skills training and the opportunity to share best-practice insights, tools and processes.
NCPO currently combines the power of 80,000 employees and €17 billion in revenue, generating savings of around €10 million per annum and a value created of €100 million per annum.
Out of adversity comes opportunity and the best commercial minds will always respond to frustration with innovation. NCPO is an outstanding example of a group of management teams identifying a problem and sharing their professional insights to craft a solution that has generated considerable opportunity and value for its participants. I am delighted to accept this award on behalf of all those Nordic Capital portfolio companies – current and past – that have contributed to NCPO’s success.
Previously the award has gone to a single company within a private equity portfolio but, this year, the Nordic Capital NCPO approach of generating value across multiple companies by enabling them to partner together and share best practices stood out from the competition. In addition to demonstrating significant savings in 2016, NCPO has a clear vision of how to increase the value from procurement in further direct and indirect spend procurement categories across its portfolio through to 2020.