Situation
- A global energy organization had been struggling to meet inventory level targets and continually experienced both stock shortages and overages
- While both Sourcing and Procurement organizations existed within the organization, the delineation of activities was not respected nor commonly understood, leading to overlaps and gaps in responsibility
- Tactical fire fighting became the norm, at the expense of Vendor Management and control
- SLKone was retained to review and assess the current state organizational model, clarify Roles & Responsibilities, and effectuate functional cost reduction and driving proper support levels
Bespoke Solutions
- SLKone identified all organizational resources performing Sourcing or Procurement activities across the matrixed divisional and regional organizations to create activity assessments
- Activity listings were developed and used to facilitate work sessions to gather additional inputs and feedback
- A centralized, commodity-organized Strategic Sourcing organization was established that emphasized the utilization of shared services within the organization
- Roles and responsibilities within the new organization were developed
- Established and managed a PMO to ensure successful implementation and change management
Leading With Results
- Transferred 40% of tactical purchase order creation, tracking and payment activities, to the shared service center
- Reduced functional costs by 8% (~$3M) (Compensation, T&E, Contractors)
- $25M annual additional savings through improved vendor management. Savings were driven by the delineation of activities, improved responsibility allocation, and establishment of the Strategic Sourcing team