Procurement & Sourcing Optimization
Procurement & Sourcing Optimization
It is not enough to drive one-time savings. It is more important to establish effective capabilities within a procurement organization to achieve continual savings.
Companies are adjusting to the new global economy and the changing supply chains due to many factors including the COVID-19 pandemic. These organizations are becoming severely strained and procurement professionals are scrambling to adjust to their changing supply and demand models, as well as dealing with immediate issues regarding inventories, delivery, changing sources of supply, and pricing dynamics not seen in decades.
fairsystems’ Procurement & Sourcing team delivers customized solutions through our dedicated sourcing resources, our industry-experienced operators, and our established group of subject matter experts. Over the past 18 years, we have developed a procurement and sourcing expertise that continues to deliver results that are driven by:
Deep Sourcing Expertise
- Process and category experts;
- Senior procurement leaders;
- Direct category experts covering leading commodities, raw materials, and other customized solutions;
- Indirect category experts supporting supply chain, GS&A, and professional service expenditures;
- Network of internal and external subject matter experts;
- Make vs buy and Insource vs outsource.
Private Equity Experience
- Worked with middle-market portfolio companies in almost every vertical;
- Can play an interim implementation role to ensure savings are “captured”;
- M&A integration, synergy assessment & capture;
- Provide training, skill development, and knowledge transfer to the current procurement team;
- Assessment of current organizational maturity levels and development of plans to close gaps.
Ability to Identify and Capture Savings
- Millions in realized savings over tens of projects and dozens of commodities sourced for mid-market, private, and public companies.
- Every dollar saved is an equal improvement in EBITDA, which results in valuation increases that are a multiple of the dollars saved;
- Sustainable improvements that allow the organization to continue to realize benefits long after projects have ended.
fairsystems’ typical procurement & sourcing program encompasses three phases: 1) Assessment & Spend Diagnostic phase, 2) Delivery & Category Sourcing phase, and 3) Optimization & Sustainment phase.
1) The Assessment & Spend Diagnostic purpose is to define the magnitude of spend within a single portfolio company and/or across the enterprise and determine savings, improvement opportunities, and timeline. Typical assessment and spend diagnostics include:
- Strategic Sourcing capability;
- Contract review and maturity assessment;
- Vendor managed inventory;
- Spend Diagnostics to include commodity spend and risk assessment;
- Make vs Buy process maturity;
- Supplier qualification process assessment;
- Metrics and performance management review;
- Enterprise & organizational assessment and ability to leverage spend;
- Cost reduction targets and language;
- EBITDA impact and implementation timeline;
- Procurement performance assessment.
2) The Delivery & Category Sourcing phase is focused on improving targeted spend categories and process/organizational gaps identified during the assessment phase. Ultimately this phase drives sustained improvement and delivers bottom-line results. Industry-specific solutions are implemented using 18 years of sourcing and procurement expertise. Typical workstreams include:
- Interim Management;
- Strategic sourcing process;
- Supplier rationalization;
- Direct and indirect spend reduction;
- 3rd Party & outsourcing consolidation and effectiveness;
- Negotiating and contract support;
- Supplier qualification;
- Category management and strategy development;
- Organizational redesign to support sourcing strategy;
- Supplier cost reduction targets and contract language;
- M&A integration and support;
- Supplier relationship management;
- Supplier segmentation.
3) Finally, the Optimization and Sustainment phase is designed to ensure implementation roadmap is as per plan, organization and processes are established to ensure sustainability and deliver results identified utilizing:
- A global organization with multinational sourcing experience;
- Working hand in hand with organization driving improvement;
- Subject matter experts who “have been there and done that”;
- Deep industry experience to bring best practices to bear;
- Dedicated relationship management to ensure a cohesive team approach;
- Supplier performance improvement metrics and reviews.
Over the years, fairsystems has developed a comprehensive approach that combines strategy, governance, and execution to not only drive benefits but also sustain and improve them over time. A key attribute of our approach is balancing direct savings initiatives with building world-class, sustainable procurement capabilities and processes within a company’s procurement organizational structures and technology solutions.
Check out one of our client success stories here.