Problem
With no formal internal procurement capability and a number of separate business units, there was no joined up approach to contract negotiation or cost reduction activity. The business didn’t have a single view of their spend or supply base creating cross over and duplication. They had identified the need for commercial support but were not sure that the need justified an FTE.
Solution
An initial spend and risk opportunity analysis was recommended as a good way to get a full overview of the spend and supplier portfolio. The data was taken from the internal finance systems and then Aster were able to pull together an initial report detailing the suppliers by business unit and category to show where the large areas of spend sat, how many suppliers the company was using and areas where there was potential for consolidation, cost reduction and risk management.
Results
For the first time, the client had visibility of their third party spend split by business unit and category. This informed the first phase of a procurement strategy.
Key stakeholders were engaged, the forward spend was validated and priorities for activity were agreed, creating a single, joined up action plan for supplier engagement.
Aster were able to help the client identify areas of potential third party risk and work with the client to build a model to manage this going forward.
