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.

2. The Journey from Savings Opportunity
to Savings Realization
Presented by:
Phil McDonald
Director – Strategic Sourcing, Carlson, Inc.
October 27-29, 2013

3. The Journey
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The Dream
The Tool & The Project
The Analysis
Engaging the Global
Sourcing Council

The Sourcing Council’s
Hard Work

The Savings

4. 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
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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

5. The Tool & The Project
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Global Sourcing Council formed
Dream realized – Brought in iAnalyze
Set up Taxonomy using United Nations
Standard Products and Services Code®
(UNSPSC®)
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Gathering data – no easy task
Utilizing Zycus to normalize the data

6. The Analysis
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Total Spend
Common Spend across operating groups
Common Spend across global operating group
Identify top six initiatives
Contracts in place

7. Engaging the Global Sourcing Council
 Provided context of analysis to the team
 Obtained consensus on how to move forward as a team

8. 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

9. The Sourcing Councils Hard Work
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Biweekly meetings
Subcommittee meetings
Project tracking
RFPs conducted
Contracts shared
Additional data gathering

10. 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

11. Questions?

12. 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