Client:

• Leading Global Company, based in Austria.
• Result of a Recent Fusion of two major Global Companies .
• Plants in Europe, North America, South America and China

Challenges/ Problems to be solved:

• For MRO in Europe
• Reduce the huge number of suppliers to a few category champions with a wide enough product portfolio, great capabilities and a decent geographical coverage

Achievements

Winning MRO Sourcing Strategy

• Selecting and engaging with the best suppliers (categories
  champions) with the right product / brand portfolio, the
  appropriate geographical coverage and the right set of
  capabilities (Technical, Logistical, E-Procurement, Reporting,
  Managerial (Ability to manage the client as a real Key account
  and commit to generating Operational Cost Savings) ).
• Reducing the number of suppliers from over > 1500 to less
  than 12

Successful Transformation Project

• An Industrial MRO Project is not only a Procurement
  initiative but has to be managed as a transformation project,
  because it involves allot of Stake Holders and changes the
  relationship with the remaining suppliers.
• Setting up the right governance for this project was essential:
  from Top Management Attention (CPO / CFO) to having a
  collaborative approach involving the key Stake Holders was
  essential for the success of this project.
• The Key Stake Holders: Plant Management, Maintenance &
  Engineering, Store Management and local Procurement. We
  defined benefits for every Stake Holder to have their
  engagement and support throughout the project.

Fantastic Results

• Drastic Supplier Reduction
• Overall, 17% Committed Cost Savings on year 1.
• Year on Year committed Operational Cost Savings
• 3-5 Years Contracts in place with a defined project roll
  out to implement cost savings and harmonized and
  improved SLAs.
• TCO Reduction (better prices, effective P2P Processes)
• Working Capital Reduction
• Productivity Increase
• Improved Service

Results after 1.5 years:

• 17% Cost Savings encompassing Price and committed operational savings in year 1.
• Year on Year Committed Savings.
• New level of Supplier Relationship with the retained few.