Training program based on Coaching & Mentoring model enhanced cross-category learning of procurement team.
Strategic Sourcing in Contingent Workforce
Strategic Sourcing initiative significantly reduced structural costs in Contingent Workforce category
Overview
A US based software product company had a large multi-million dollars external spend on Contingent Workforce category across its various functions, primarily in product engineering & development activities. Company was looking to optimize the spend across its supply base.Challenges
- Highly fragmented spend across a very large supply base with a long tail of low dollar spend.
- Lack of centralized procurement activities, controls and supplier contracts.
- Legacy supplier relationships and cost structures.
Solutions
Legacy spend behaviour was analyzed through various lenses including incumbent rate card structure, consumption pattern, service locations, criticality of services for operations etc. On the external side, a detailed market benchmark study was presented.Various work streams included –
- Spend Mapping
Identified key areas of improvement through a detailed spend mapping exercise. - Supply Market Assesment
Conducted detailed supply market assessment including benchmark pricing by skill & experience levels and delivery locations. - Sourcing Strategy
A comprehensive RFP was conducted that included global spend, functional requirements and global supply base. - Operational Integration
Project management was key to successful implementation that ensured timely completion sourcing activities and seamless integration. - Supplier Performance Management
A special emphasis was placed on performance management through contract compliance – optimize consumption and service locations, stop leakages, and strengthen supplier relationships through SRM framework.
Results
The company achieved significant cost down while improving supplier performance as well as reduced continuity risks.
Key outcome of this exercise included –
- A 25% run-rate cost reduction on a multi million dollars spend.
- Tight supply contracts that provided significant protection on cost management as well as productivity improvement.
A comprehensive Strategic Sourcing approach is the key to create lasting value in Contingent Workforce category
Other Case Studies
Data Cleansing & Categorization
A leading Pharmaceutical company significantly improved its spend visibility through Data Quality Enhancement Initiative.
Project Management Diagnostics
A leading Indian industrial manufacturing company conducted a comprehensive project management audit to improve practices and overall maturity level.