Category Management : Procurement Synergies

Finding procurement synergies in a decentralized group
Case study
10/09/2014

Context and challenges

This study concerns a decentralized manufacturing group that was established in specific business lines, with multiple entities worldwide. The entities had disparate procurement practices and maturity, and procurement was managed by individual entities (by country or even by site). The market context meant that the company needed to rapidly improve its competitive performance and generate procurement savings. There was also strong pressure to optimize costs, in an environment that imposed significant technical constraints.

Approach and methodology

- Analysis of the procurement portfolio and creation of a detailed roadmap
- Definition of potential categoryspecific synergies, based on shared needs and supplier market structure
- Assessment of the need to implement Category Management across three pilot categories:
• Strategic levers to be implemented
• Potential savings
• Acceptability to different entities
- Organization recommendation and implementation of a Category Management team
- Creation of key tools and methodologies for the group’s Category Management

Results

- Three category managers recruited and trained to implement action plans
- 10-15% savings achieved in the pilot area
- Procurement collaboration processes jointly defined by corporate management and the entities, making it possible to develop additional synergies in the medium term