A robust Supplier Performance Management (SPM) program helped identify key long-term supplier partners and improved overall supply chain performance.
Strategic Sourcing in Travel Management
Spend portfolio segmentation and analytics using Kraljic Matrix helped a leading global tire manufacturing company identify gaps and improve its indirect spend management.
Overview
Company was looking to improve its sourcing strategies & processes to alleviate procurement team’s ability in better enabling business operations.
Challenges
- Highly fragmented spend with a long-tail supply base coupled with large number of SKUs resulting in delayed procurement (PR-PO) cycle time.
- Ineffective utilization of rate cards.
- Poor internal customer satisfaction.
- Lack of strategic sourcing approach.
Solutions
Our detailed spend analysis process, from data cleansing & categorization to spend portfolio segmentation using Kraljic Matrix, helped identify gaps & areas of improvement, specifically within non-critical and bottleneck categories.
Various work streams included –
- Data cleansing and categorization up to 3 levels.
- Identified various gaps including supply base fragmentation, unit-price variances across plants, specification variations across SKUs etc.
- Developed category portfolio segmentation (Kraljic Matrix) for improved visibility into the current state and future strategy formulation.
- Conducted end user interviews to understand and validate key challenges.
- Conducted procurement team workshop to help assimilate current state of procurement operations and develop future strategies to address the gaps.
Results
Spend portfolio segmentation helped identify gaps to improve spend management.
Key outcome of this exercise included –
- Clear roadmap to address key procurement challenges – continually reduce costs while managing supply risks.
- Opportunity to optimize the fragmented supply base for better cost position.
- Opportunity to utilize rate contracts for improved spend control.
Maximize supply security and reduce costs, by making the most of your bargaining power through spend portfolio analysis using Kraljic Matrix
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