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Horizon 2013 The Journey from Savings Opportunity to Savings Realization - Carlson

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Learn how Carlson implemented iAnalyze leveraged procurement automation and achieved $5 million in cost savings through a global sourcing initiative. Get insights into the key success factors and the approach adopted by the procurement team at Carlson to realize the hard dollar savings and maximize value from technology implementation. The keys to success were related to the vision of Corporate Finance and the establishment and leverage created by the Global Sourcing Council.

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Horizon 2013 The Journey from Savings Opportunity to Savings Realization - Carlson

  1. 1. The Journey from Savings Opportunity to Savings Realization Presented by: Phil McDonald Director – Strategic Sourcing, Carlson, Inc. October 27-29, 2013
  2. 2. The Journey     The Dream The Tool & The Project The Analysis Engaging the Global Sourcing Council  The Sourcing Council’s Hard Work  The Savings
  3. 3. The Dream  Use a Tool that will give us Knowledge of Global Spend  Gather data from Global Sources  Dollars spent by Category  Dollars spent with suppliers  Dollars spent by Operating Groups    Knowledge will allow us to devise a strategy for managing our spend Create a Global Sourcing Council to drive initiatives from Finance Knowledge will help us to communicate strategy with Global Sourcing Team
  4. 4. The Tool & The Project    Global Sourcing Council formed Dream realized – Brought in iAnalyze Set up Taxonomy using United Nations Standard Products and Services Code® (UNSPSC®)   Gathering data – no easy task Utilizing Zycus to normalize the data
  5. 5. The Analysis      Total Spend Common Spend across operating groups Common Spend across global operating group Identify top six initiatives Contracts in place
  6. 6. Engaging the Global Sourcing Council  Provided context of analysis to the team  Obtained consensus on how to move forward as a team
  7. 7. Strategic Sourcing Opportunity Discovery Process Leverage - Volume Concentration • Consolidate number of Suppliers • Pool Volume across regions • Redistribute volume among suppliers • Combine volume from different sourcing groups Global Sourcing • Expand geographic supply base • Leverage second tier supplies • Profit from global supply/ demand unbalances or Analysis Best Price Evaluation • Benchmark internal process • Renegotiate/rollback prices • Un-bundle prices • Price Variance • Compare total cost among potential suppliers Joint Process Improvement • Reengineer (joint) processes • Optimize physical materials flow • Integrate Logistics • Use simultaneous engineering joint R &D • Share productivity gains • Contract vs. Off Contract Relationship Restructuring • Examine strategic ‘make’ versus 'buy’/’own’ versus ‘lease’ • Pay for function/performance • Employ strategic alliances / partnering – e.g. GPO Product Specification Improvement • Rationalize/standardize products • Substitute products • Manage Demand • Use functional/black box buying • Optimize life cycle cost
  8. 8. The Sourcing Councils Hard Work       Biweekly meetings Subcommittee meetings Project tracking RFPs conducted Contracts shared Additional data gathering
  9. 9. The Savings  To date, three out of the six priorities have produced $3 million in savings  Subprojects will contribute an additional $2 million in savings
  10. 10. Questions?
  11. 11. The Journey from Savings Opportunity to Savings Realization The Dream The Tool The Project The Analysis Engaging the Global Sourcing Council The Sourcing Councils Hard Work The Savings

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