Procurement Transformation: A three-year transformational journey, Sourcing@12, in the Danish pharmaceutical company Lundbeck

Ken Friis, CPO

Ken Friis is Vice President & CPO Corporate Sourcing in Lundbeck, which he joined in mid-2009. He has an 18-year track record in operations management, particularly transformation of decentralised procurement into a more robust, centrally led, global strategic sourcing organisation.

Read the Lundbeck article, "CPO's First 100 Days"

Jon Hughes and Ken Friis wrote an article together for Procurement Leaders (2010). They outlined ten approaches that ensure a CPO builds the right platform to secure a mandate for change during their first 100 days.

Access the article here in the Knowledge Hub

  Watch the video interview with Ken Friis

Business Situation

What was the problem?

Solution Implemented

How did FP resolve it?

Benefits Delivered

What was delivered?
  • Major strategic refocusing under way across the company, with top executive emphasis on change.
  • New CPO appointed as a change agent for procurement transformation, with a determination to become “#1”.
  • Lundbeck suffering from no strategic sourcing, fragmented spend & transactional purchasing.
  • Needed better people, business alignment, strong support for business goals and drivers.
  • Positioned as a change management journey and a three-year phased structured programme.
  • Developed strategy and road map, Sourcing@12, with executive endorsement for investment in capability and competence.
  • Six phases of change in the road map. Quick wins built momentum then adoption of core processes.
  • Spend visibility, cost transparency, formal savings tracking, “one set of numbers and no funny money”. All validated by Finance.
  • Sourcing@12 delivers 12%+ cost down, 10:1 return on investment, explicit EBIT and profit contribution.
  • Quick wins gave credibility, and demonstrated success. Programme broke even in six months.
  • Competence and capability dramatically strengthened, with much stronger team and processes.
  • Business-wide governance adopted, with integrated procurement structure, consistent application of category management and globalisation.

Examples of Cost & Value Opportunities Delivered:

savings from the quick wins programme
savings from category management programme
full adoption of process toolkit & skills building
significant improvement in procurement function's profile
major strengthening of procurement competence

Delivery of the Programme - A Step-by-Step Journey over Three Years:

 

Tagged by Sector: Pharmaceutical and Healthcare

Tagged by topic: Procurement Transformation

Knowledge Hub