Efficio's Organization and Operating Model Redesign helps large and complex organizations to plan, size, recruit to, train for and operate centralized procurement operations that enable best practice sourcing and procurement.
Many of our clients experience fragmented purchasing, perhaps because acquisitions have not been fully integrated, or because short-term supply chain problems and firefighting have made localized Procurement operations appear attractive.
Others are victims of success – growth, and thus external spend, has outstripped the abilities of ‘part time buyers’. Reasonably mature companies can have an external spend that exceeds 60% of turnover, and yet have no organization in place to aggregate requirements, exercise purchasing leverage, make Strategic Sourcing decisions or ensure compliance with tactical purchasing policies.
The result is a supply chain that is:
- Paying over the odds
- Costly and inflexible to operate
- Missing significant opportunities for savings and improvements
- Creating significant risk – for example, by failing to notice that key contracts are due for renewal
Proven track record
Efficio has unrivalled expertise in strategic procurement, across all spend categories, direct and indirect, and all types of operation. This insight enables us to create an Organization and Operating Model that is bespoke to your organization’s current capabilities and future needs.
First year annualized savings for clients, which are as diverse as Informa plc and South West Police, almost always exceed the costs of building the new team and organization. This is because creating an appropriate Procurement organization enables you to:
- Achieve sustainable cost savings
- Consolidate supply base and spend to discover and exercise purchasing leverage
- Create effective and compliant spend control
- Visualize and prioritize opportunities for further improvement and a long-term savings pipeline
Procurement savings and efficiencies feed directly and in full to the bottom line, and we expect the work to be cost-neutral or generating a positive ROI after year one. But that is a starting point, not a finishing line.
How we work
We will help you build an organization that can devise and enforce centrally agreed procurement policies and strategies. These will differ from client to client; for example, procurement execution may remain decentralized for good reasons, but now within a framework that ensures all procurement activity is supporting the overall business strategy, regardless of apparent local or short term advantages.
We engage with key stakeholders to convince them of the need for Procurement Transformation, and to build up their expertise and confidence in the new structure. Efficio will work with your company at all levels to help identify needs and issues, and to ensure the new structure can support innovative procurement solutions without becoming a bureaucratic obstacle to development.