Ebit has been providing procurement as a managed service to a well-known DIY and home improvements retailer. With over 150 stores throughout the UK the challenge was substantial.
This retailer had no procurement function with direct responsibility for indirect category spending, and as a result only 7% of it’s indirect spending was managed through procurement.
With the backing of the Private Equity fund behind the retailer, Ebit were introduced to develop a managed procurement function. This new function was charged to sit within the business and deliver operational excellence. This could be then be adopted at the end of the engagement as well as delivering substantial savings.
Our initial strategic aim was to develop a procurement vision and operating model, locking in with the clients overall strategy. To gain an understanding of what procurement means and what it should stand for within the business.
From this base we could look to develop and constantly evolve a prioritised pipeline of activity, both strategic and BAU to meet the needs of the business. We could then drive commercial value and business improvement.
To support this activity we defined supplier excellence and implemented the tools to track and monitor performance against this. By defining what is expected and holding suppliers to account against this we can drive strong performance, minimise risk and deliver good governance.
Against all of these objectives we built the best relationships with stakeholders right across the business, becoming trusted business partners. Stakeholders will want to engage with procurement because they see the added value.
This allowed us to also define category excellence developing a framework for category management to drive sourcing best practice. This that then develops forward looking category plans that subsequently define the Procurement agenda.
Our on-site team of 4 senior experts have redefined and reshaped the indirect procurement process at this retailer, engaging the business in delivering substantial service improvements and cost savings.
Within the first year we have identified and implemented savings of over £2 million
Additional savings of over £7.75m have already been identified which will be delivered over the coming 18 months.
Total savings delivered will be around 10% of the annual spend across all indirect spend categories.
Procurement function, policies and procedures established and adopted across the company, allowing Business-As-Usual practice to meet the needs of the entire business.
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