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Upgrading procurement & capturing long-term savings for carve-out (CS270)


This story is for CEOs who

  1. Have lost essential services in the aftermath of a carve-out

  2. Are struggling to rebalance supplier relationships

  3. Lack sufficient data about spend and the root causes of procurement problems


The Challenges

After carve-out from a larger organization, a global provider of clean alternatives for manufacturing and refining processes found itself with a weak procurement team and little visibility into its supply chain.


Salvaging supplier relationships, ensuring deadlines were met, and reducing risk

SGS Maine Pointe:

  • Mitigated the risk of sole sourcing and drove prices down by seeking alternative suppliers on-shore, in-shore, and near-shore
  • Gave the C-suite visibility into operations and potential bottlenecks, enabling data-based decision making
  • Provided a single source of truth by retooling the SIOP process with real- time data, KPIs, and more consistent compliance and tracking
  • Created a spend cube that provided a detailed and reliable analysis of the who-what-where of procurement spend


Lessons learned for other executives

  • Sustainable change to business practices is possible with an end-to-end supply chain analysis and SIOP process
  • Root causes seldom reside in just one function; planning, sales, procurement, operations, engineering, and logistics all contribute
  • Re-alignment after a carve out requires a Total Value Optimization (TVO)TM approach


The Results

  • $4.8M ROI in year one
  • $9.35M EBITDA savings in year one
  • 19 new suppliers
  • Upskilled engineering to stop unplanned changes
  • Developed spend cube for detailed who-what-when- where analysis and insight into procurement spend
  • Increased visibility into operations bottlenecks to expedite problem solving
  • Established sales, inventory, and operations planning (SIOP) processes


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