Case 1:
Global Medical Products Manufacturing Company
This manufacturer of medical products was experiencing rapid, top-line growth, but margins were under increasing pressure. Greybeard's approach and recommendations not only contributed to healthier margins, but also led to long-term improvements in sourcing practices.Executive Summary
Greybeard Challenge
Greybeard was initially engaged by the manufacturer's largest business unit to:
- Assess current procurement strategies and practices
- Identify opportunities for cost reduction (initially in indirect materials and services)
- Develop a transformation roadmap to achieve the opportunities
Greybeard Approach
As part of its assessment and transformation roadmap process, Greybeard:
- Analyzed external spend
- Assessed current contracts
- Evaluated procurement strategies, processes, and practices
- Evaluated staff capabilities
- Prepared an assessment of the current state and an assessment of cost reduction opportunities by major spend category
- Presented findings and recommendations to the executive team of the major business unit, and subsequently to the corporate executive team
In addition, Greybeard provided training in Strategic Sourcing & Negotiations Management to both procurement and non-procurement personnel, and our experienced sourcing advisors guided and assisted the client's teams in several key areas.
Results and Benefits
Cost reductions achieved through Greybeard's approach quickly generated quantifiable results, building credibility and enthusiasm for further improvements:
- Achieved total cost reductions of approximately 27% on the initial sourcing project, plus service level improvements from targeted suppliers
- Built additional momentum through ensuing successes in indirect materials and services, and energy management
- Established credibility for the transformation roadmap and the sourcing and negotiations processes, leading to creation of a shared services procurement organization serving all business units
- Positioned procurement and supply chain management as a strategic driver of improved business performance
Greybeard continues to provide as-needed, focused support as the company's transformation continues.
