Our client, a global mining company, was going through a period of unprecedented change. Severe financial difficulty, with revenues falling by 50% and share price drop of 80% due to falling commodity prices, meant that the procurement team headcount was being reduced from 100 to 20. There was no real programme governance in place and projects were being run in a very decentralised way.
The priorities were to identify savings opportunities and reduce costs. Coaching the procurement team in category management best practices where appropriate for the longer-term benefit of the business was also required.
During a very turbulent time for the business, Future Purchasing’s role was to act as a category management interim support team to help maintain business continuity.
Within one month we had identified potential category projects that would deliver short term savings while retaining stability across the function. We identified and supported major existing and planned supplier negotiations. We created negotiation plans that were executed through a schedule of supplier meetings.
Within six months we had set up a programme management structure to manage all category projects to successful delivery. In addition, we co-designed and delivered a category management roadshow for procurement staff across four continents – Europe, Africa, South America and Australasia.
Future Purchasing’s experienced coaches supported our client through a very difficult period.
We ensured a transparent pipeline of over 250 initiatives became owned by the supply chain team while creating $736m of savings against a target of $49m.
Under our direction, 14 category projects were instigated. Savings of $278m were identified from $4,200m of procurement spend.
Following our involvement, the team were able to implement the supplier negotiation plans to deliver the savings and the business was able to get back on to more stable footing.
“I very much like the simplified RACI chart that was shown.”Head of BU Supply Chain & JV Management (Brazil)
“I like the simplified RACI model in the Roadshow presentation.”Head of BU Supply Chain (Chile)
About Simon Brown
30 years procurement experience in line management and
Previous employment: British Aerospace, British Airways, QP Group
Education: MBA, London Business School. BA (Hons) Business Studies.