Indirect Spend

Challenge: A global chemical and building products client was experiencing rising year-over-year Indirect costs (~$70M) amid declining top-line results. The client engaged Audere Partners to develop and install the strategy, business processes and tools to drive immediate reductions in Indirect costs and to put in place sustainable controls.

OUR ANALYSIS FOUND

Minimal category management of Indirect spend

Fragmented data that could not enable decision making

Purchasing decisions and transactions occurred in functional areas without involvement from central Procurement

Limited performance management or governance controls system

Unclear roles and responsibilities and frequent reactionary behaviors

Implementation

Enhanced existing policies and procedures for Indirect spend management

Business Process Reengineering

Engaged over 200 employees on brainstorming sessions and identified 1,000+ opportunities for improvement

Business Process Reengineering

Developed a prioritized execution plan with clear ownership and accountabilities to drive savings

Business Process Reengineering

Standardized monthly P&L expense reporting by Functional area and spend category to provide spend visibility

Management Operating System

Implemented monthly functional reviews

Management Operating System

Coached functional leaders on driving the requisite behavior change across the organization in order to ensure sustainable change

Management Operating System

CLIENT SUCCESS

Results of our engagement include:

$7.4 MM in annualized savings resulting in a ROI of 17:1

11% overall Indirect spend reduction with a 16% reduction across the five largest spend categories

“This level of rigor, savings and clarification of roles and responsibilities is exactly what I wanted to accomplish with this Workstream.”

Global Supply Chain Leader

“They showed us what data analytics can do. They engaged our people and really helped us change our culture.”

VP Project Management  & Integration

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