When the procurement function at this high performance materials company was not delivering to certain expectations, senior executives engaged Maine Pointe to help them elevate it to high maturity and save $18M in the process.
The in-house procurement team often reported that they were making savings but the CFO was not able to see them coming through on the company’s P&L. Our first step was to analyze where savings could be made and to deliver measurable, sustainable results, which would allow the procurement team to strengthen their position as a world-class organization.
We examined our client’s data to identify where they were spending and who their high value suppliers were before putting into place a solution which included:
The cornerstone of our solution was to train, mentor and work with our client’s, already professional, internal team to operationalize further step changes in performance.
As a direct result of the strategic analysis of the supply chain environment, Maine Pointe and our client’s newly created cross-functional teams implemented a global optimal sourcing model. This improved access to low-cost country producers and direct-to-source raw material providers without a compromise on quality.
Increased optionality has significantly strengthened our client’s negotiating position, turning the tables on several of their most intractable chemical suppliers. These suppliers had previously demonstrated an entitled approach to supplying materials to our client, going so far as to threaten supply flow and even withholding shipments when any attempt was made to negotiate a better price. This left the company fearful of challenging non-competitive pricing and causing any further upset. As a result of the initiative to address poor supplier behavior, this situation has completely reversed. The suppliers are now eager to offer competitive prices and are actively petitioning our client on what they need to do to be “rewarded” with some future volume; a major win for our client.
Our team identified a number of additional opportunities for savings which, post-engagement, the upskilled in-house procurement team has been able to close on. In addition, the PMOS that we developed has continued to deliver incremental savings.