Business Situation

Solution Implemented

Benefits Delivered

• CPO wanted to drive a change programme using quick wins to fund it.
• Inexperienced Procurement team with limited previous training.
• Limited control over existing spend with many locked in deals.
• Very short timescale of 8 weeks to deliver the savings.

• Joint FP/Client team set up to identify a pipeline of potential cost opportunities with a 12% cost down target.
• The scope was limited to targeted supplier negotiations.
• Negotiation coaching workshop held using role plays to raise the ability of the negotiation team.
• Negotiation plans developed

• Average of 12% savings from supplier negotiations was removed from budgets as “real” savings.
• Self confidence and profile of the Procurement team increased .
• Stakeholder feedback was very positive with increased level of demand for Procurement involvement in other projects

• Using spend data by supplier spend data by supplier, the top 20 suppliers in each major category area were identified
• An opportunity analysis was carried out using a quick win framework to critically analyse the supplier contracts
• A prioritised list of suppliers was created with a 12% overall cost saving target agreed

• FP ran a one day Negotiation Planning workshop to prepare the team for focused supplier negotiations. This involved role playing scenarios especially regarding the opening minutes of the negotiation
• Each category manager was coached to prepare a negotiation plan for each supplier negotiation.
• These plans were road tested in role playing scenarios to examine the quality of the negotiation strategies.

• Each supplier negotiation was set up over a 3 week period to ensure they could be completed by the year end.
• Some negotiations were held over a number of sessions to review revised proposals
• Savings were calculated on an annualised basis with contracts due to be committed by year end.

• All supplier negotiation projects were documented in a centralised benefit tracking spreadsheet .
• Progress was reviewed each week at a Monday Morning meeting where all CMs had to present their negotiation status.
• All savings were validated and signed off by Finance against specific criteria with all savings eligible to be deducted from the budgets