Cost Reduction - The Procurement Hive

The CFO wishes to conduct a review of all third party spend but spend visibility is poor across the business.

Perhaps you are looking to do better business with a fewer number of preferred suppliers, introduce a different supplier portfolio or renegotiate existing contracts with suppliers?

The Procurement Hive team are experts in Spend and Opportunity Assessments which are done at pace and deliver:

An accurate and granular spend profile, presented in a series of procurement dashboards.
A qualified view of on-going active spend management options, to include a digital procurement perspective.
A bottom up, category-by-category opportunity analysis, with estimates of potential savings.
A qualified view on approach to market, for where there is supplier choice or where existing single sourcing contracts will remain.
An Implementation Plan – a comprehensive but pragmatic roadmap for achieving target savings and value. One which distinguishes between ease of implementation versus spend category complexity versus savings opportunity.

Our approach

A successful sourcing programme hinges on the ability of your organisation to thoroughly understand and have control of all spend. Getting spend analysis right is an essential step toward bringing more spend under management, delivering sustainable cost reduction, spend category process improvement and overall value creation. McKinsey and Gartner benchmarks recognise a 5%-15% savings potential profile, for 70% of addressable spend influenced.

Our spend analyst will conduct a comprehensive review of all direct and indirect spend. They will create a spend taxonomy and categorise the data, then present it in a series of dashboards. The analyst, working with the Procurement Hive lead consultant, will assess whether there is a cost justifiable value for a lite digital procurement implementation for active on-going spend management, under procurement leadership. The approach we take delivers deep insight in quick time and can be easily integrated with your ERP.

This sets the stage for the development of strategic sourcing plans — a key factor in procurement’s effectiveness. The Procurement Hive consultant will lead and facilitate a savings and value opportunity assessment, working in collaboration with Procurement, Finance and relevant key stakeholders.

Our approach

Cost reduction

Cost reduction approach

We will deploy our structured sourcing methodology, using the spend category baselines, analysing the relevant supplier markets. We will lead the end to end tender process for each product/service, covering at a high level:

Creation of the detailed go to market strategy, to include shortlisted supplier profiles
All supplier engagement and communication.
Creation of the tender documentation.
Facilitation of all internal stakeholder dialogue.
Development of supplier selection criteria.
Day to day management of the tender process from issue to review through to contract signatory.
Contract and pricing negotiation.
Contract execution and implementation into a supplier management led approach.

For where there are no opportunities to go to market and competitively tender, given supplier dependency, we will lead the commercial/relationship conversations with these suppliers to renegotiate existing contract terms.

Our structured approach delivers measurable savings that can be traced through to the bottom line. We will work with your Finance protocols/savings definitions to distinguish between one-off and sustainable benefit. We place an emphasis on total cost than purely price, to ensure that quality and relationship is not impacted.

We will look to leverage your brand and position in the market to move your organisation towards a customer of choice position with your strategic suppliers.