We started our Procurement and Strategic Sourcing practice because our clients expressed a need for new ways to decrease costs and improve service. Here were some struggles they faced:
- Mature categories that had already been sourced two or three times
- Single or limited source supply markets
- No new leverage to exert over suppliers
- Budget pressure to reduce costs but not cut service
- Lack of subject matter experts in their categories
- Poorly written supply agreements with no KPIs
- Risk management and mitigation techniques not being deployed
- No framework for prioritizing categories
- Too much time being spent on categories with little to show for it
Using proven techniques honed over decades of experience Chicago Consulting helps companies understand how supply chain decisions impact procurement and category costs. We start with applying our proprietary cost and service framework:
First, we discuss what success might look like by having detailed conversations with an extended group of stakeholders impacted by their category. We listen and capture their responses. For some it may be cost savings, for others reliability of performance. A significant amount of our time is spent in this step understanding differing viewpoints about what is really important.
Next, we understand the current category costs and the service levels suppliers currently provide to key stakeholders. We also quantify the down-stream costs of material failures and supplier failures. Other interrelated categories may be included at this time if their costs are intertwined. A good example of this would be combining fleet costs and fuel; for others its supply chain costs of transportation, warehousing, and packaging.
Then we understand how our client’s behaviors and habits add to their suppliers’ costs. We document what supply chain improvements must be made.
Finally, armed with this knowledge, we begin to map out and executing a supply chain strategy. This allows our client to emerge with a radically different cost and service structure that meets their goals.
Throughout this process, Chicago Consulting experts share their considerable experience and transfer category knowledge. It is imperative that any solutions be structured so that end users embrace the findings and adopt the recommendations.
- Direct Materials
- Plant Equipment
- Contractor Services
- Professional Services
- Indirect Materials
- Shared Services
Call us at (312) 346-5080 to talk about your Procurement and Strategic Sourcing objectives. We’ve likely “been there” before and can quickly contribute to your efforts.