We worked with a large automotive company on a purchasing transformation. A key objective was the transition to a new operating model that would differentiate between strategic buyers and transactional buyers.

A limiting factor was the inefficiency built into the company’s legacy model. Buyers were spending time on non-value-adding and non-differentiating activity. Rapid growth had compounded these issues.

In just 4 weeks our objective was to:

• Identify opportunities to shift buyer time away from non-value-adding and transactional-based activity

• Develop recommendations that yielded benefit to release at least 10% capacity across the purchasing function

The solution

We collaborated with a team of buyers to conduct an end-to-end process diagnostic. This included:

• Building capability through the delivery of Lean awareness training that educated the buyer community on key Lean principles, concepts and tools

• Identifying improvement opportunities through a 4-week diagnostic. We leveraged DILO (day-in-the-life-of) techniques to observe the actual work and distinguish between time spent on value-adding vs non-value-adding activity

• Developing a diagnostic report with solution work packages that unlocked benefits across multiple improvement levers e.g. Simplification, Automation via Robotic Process Automation and Outsourcing to a shared service centre.

• Designing a programme to deliver all identified improvement opportunities

• Ensuring each work package had a sponsor, delivery lead, and a clear path to delivery

The result

1. FTE productivity benefits identified & validated

2. Direct cost savings identified as a result of outsourcing and RPA opportunities

We worked with a large UK telecommunications firm to reduce the time from receiving supplier quotes to purchase order approval.

In one spend category, the average time from receiving quote to PO approval was 46 days, which led to a large majority of suppliers working at risk. The existing process was very manual and time-consuming due to fragmented systems and data management.

The objective

In just 4 weeks, our objective was to:

• Conduct a deep dive into the procure-to-pay process to understand the root causes of the delays

• Develop recommendations to reduce the time from quote to PO approval by at least 75%

Our approach

We collaborated with finance, procurement and operations to conduct an end-to-end process diagnostic. This included:

• mapping the procure-to-pay process end-to-end

• conducting a value stream analysis to establish timings for each stage of the process and locate bottlenecks

• analysing the approval touch points and DoA policies

The solution

We outlined three options to solve the client’s problem:

1: Quick wins and tactical process improvements

2: Process improvement

3: Full end-to-end integrated solution via an S2P Platform such as SAP Ariba or Coupa. 

The client selected option 2 which meant implementing the following:

• People: assignment of a process owner for the Procure-to-Pay process

• Process: elimination of duplicate approval touch points

• Process: simplification of the DoA approvers

• Technology: digitalisation of quote and contract approvals

• Technology: enhancements to the ERP system to link contract and PO with associated controls

The result

• 67% reduction in the time from quote to PO approval

• 95% decrease in the number of suppliers working at risk