A company reached out for help following challenges with its ERP system and operational processes. It was evident that the rapid growth of the company had surpassed the capabilities and processes of the procurement team.
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- Transforming Procurement Leadership in an Australian SME
Transforming Procurement Leadership in an Australian SME
Problems
A stoke consultant was engaged to assess an Australian SME specialising in consumer products with a global presence.
Over 15 years, the company’s revenue soared from $20M to $300M. The procurement team, however, struggled to keep pace. They lacked essential training in cost savings and negotiation skills, while operating without a cohesive corporate policy or clear metrics, and suffered from inadequate leadership. This led to significant missed opportunities in cost savings.
Solution
Talent Acquisition: Recruiting skilled procurement professionals.Training: Developing and delivering comprehensive training to the team.Goal Setting: Establishing ambitious annual targets and stretch goals.Recognition: Celebrating the team’s achievements upon meeting these targets.Action Planning: Implementing and enforcing rigorous short-term action plans.Mentoring: Providing ongoing, focused mentoring sessions.Integration: Incorporating these strategies into the annual forecasting process.
Outcomes
- Year 1: The team achieved $2M in direct savings, significantly impacting the bottom line.
- Year 2: Within the first four months, savings were trending to achieve to $3.4M.
- Target Focus: Resources were effectively allocated to specific products.
- Training Impact: The initial training phase not only met but exceeded cost-saving targets.
- Reputation Building: The procurement team gained recognition for their effective cost management skills.
- Supplier Relations: Key suppliers became fully supportive of the initiatives, leading to a smooth and mutually beneficial relationship.
This case study exemplifies the transformative power of strategic leadership and training in procurement, driving substantial cost savings and fostering a culture of efficiency and effectiveness. Procurement can indeed generate cash to the bottom line under the right conditions, with the investment in top supply chain talent paying significant dividends.
