Ten Steps to Lower Procurement Costs
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Ten Steps to Lower Procurement Costs

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Ten Steps to Lower Procurement Costs in Life Sciences Webinar Presentation

Ten Steps to Lower Procurement Costs in Life Sciences Webinar Presentation
Michael Eckstut, Archstone Consulting and Ken Roy, SciQuest

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Ten Steps to Lower Procurement Costs Ten Steps to Lower Procurement Costs Presentation Transcript

  • Ten Steps to Lower Procurement Costs in Life Sciences Actionable steps to deliver value and boost the bottom line in four months or less Now available for download at www.sciquest.com/archstone
  • The Authors
    • More than 30 years of consulting and operational experience in large, small and early stage life science companies. Advisor to companies on sourcing and procurement effectiveness and transformation since the mid-1990’s.
    Photo Michael Eckstut Principal and Practice Leader of Life Science and Strategy Practice www.archstoneconsulting.com Ken is a 23 year veteran of crafting and deploying enterprise technologies designed to improve efficiencies at the strategic, tactical and operational levels within the Life Science industry. Ken Roy Vice President of Life Science Practice at SciQuest www.sciquest.com
  • Cutting Costs Has Taken Center Stage
    • Working capital
    • Discretionary spending
    • Non-critical capital programs
    • Overhead costs
    • Inefficient processes
    • High rate of errors
    • General pressure on all SG&A budgets
  • Cost Savings & Procurement
    • For most companies, current productivity improvement and cost saving initiatives will not yield sufficient cost reductions.
    • Procurement initiatives can help:
      • Procurement has a high impact on bottom line and profitability
      • $1 of savings = $6 of revenue growth
      • Short term gains launch long term sustainability
  • Procurement CAN Make A Difference
    • Actionable strategies across four major areas:
    Sourcing Governance and Compliance Supplier Relationship Self Funding
  • Sourcing
    • Mine Value From Segmentation.
    • Re-evaluate spend in major, market sensitive categories.
      • Transportation, IT Capital, Professional Services, Travel, CROs
    • Build Opportunities In Spend.
    • Review long-term and high-value contracts.
  • Governance and Compliance
    • Eliminate Sacred Cows.
    • Opportunity to deliver value across all categories and organization.
      • Build business case / cost savings scenario
      • Analyze spend and opportunities
      • Establish contracts and preferred suppliers
      • Apply procurement best practices
  • Governance and Compliance
    • Adopt Best Practices.
    • Benchmark Strategic Procurement processes and tools to drive compliance.
      • Centralize procurement function
      • Funnel spend through online catalogs
      • Streamline approval processes
      • Monitor and analyze spend
  • Governance and Compliance
    • Lower Sourcing Threshold.
    • Increase competitive bidding by enabling people and processes through technology.
    • Never Overpay.
    • Automated invoice validation and Closed Loop Matching to focus AP
  • Supplier Relationship
    • Mitigate Supplier Risk.
    • Define, measure and balance your supply chain risk.
      • Build a supplier scorecard and assess your suppliers’ health
      • Add suppliers to address single points of failure
      • Leverage external information to augment insights
  • Self Funding
    • Ask for a Stimulus Package.
    • Leverage suppliers for greater discounts to assure long-term relationship.
    • Negotiate a Self-Funded Discount.
    • Early payment discounts.
  • Take Action Now!
    • Identify areas best suited for success
    • Execute immediately
    • Embrace economic hardships
    • Achieve 6-fold profitability impact
    • Deliver benefits in 4 months
    • Lay the foundation for best-in-class procurement processes and systems
  • Recipe For Success
    • Get senior management support
    • Define target areas to pursue
    • Develop specific projects
    4. Track Results
  • For More Information: 6501 Weston Parkway Cary, NC 27513 www.sciquest.com Ken Roy Vice President Life Sciences Practice T 215 654 0893 C 215-262-0997 [email_address] . com One Bush Street Suite 505 San Francisco, CA 94104 www.archstoneconsulting.com Michael K. Eckstut Principal Life Sciences Practice Leader T 415.249.3533 C 415.359.6395 F 415.249.3501 meckstut @archsto neconsulting. com