| |
|
-
Major Pharmaceutical Company
-
$1.6 billion annual spend
-
On-time performance poor
-
Exceeding project budgets
-
Well-staffed department
Despite having a well-staffed global construction Procurement department group, and an annual spend of over $1.6 billion, the client was not showing significant benefits.
Engagement with suppliers, engineers and site procurement was poor.
Most Construction services were still bought individually by site with limited leverage of the global scale of the business.
Construction project success was judged primarily on “In Budget/On time” criteria.
Value to the business of a new installation typically far exceeded the purchase price. |
|
|
-
Global cross-functional teams
-
Clear business requirements
-
Key Market intelligence
-
Total Life Cycle Cost management program
-
Comprehensive Supplier Management program
Global cross-functional teams were commissioned, led by procurement, but with significant support and involvement of corporate engineering, site engineers and other key stakeholders.
QP Group education workshops followed by facilitation helped identify key issues, true business needs versus wants, supply market analysis and total life cycle costs.
Parallel work streams were identified and improvements implemented to the current installed base e.g. by better supplier management.
Strategies developed for improved equipment procurement.
Road show conducted to inform the business and stakeholders of the changes and get their buy-in and understanding of the new processes from which they would benefit.
|
|
| |
-
$150 million savings achieved
-
Global leverage to the local level
-
Clear roles and responsibilities
-
Improved process quality
First year savings delivery was $150 million (10%) of price benefit.
Significant up-front work helped clarify roles and responsibilities that had previously been in conflict.
By prioritizing efforts on sites with upcoming spend, the benefits of global leverage were seen and actively grasped by local project managers.
Improved use of supplier resources and sharing of in-house experience is delivering process quality, yield and other non-price benefits which will double the value of savings.
|
