Strategic sourcing and procurement

Spending less to make more

How can you improve the bottom line without making customers or staff feel like they’ve been short changed? By eliminating every element of waste in the external spending category that, on average, accounts for between 40 and 70 per cent of a company’s cost structure.

From capital projects to capital equipment, raw materials, outsourced services and the full range of indirects, every form of sourcing and procurement should be under the microscope. There is increased pressure to consider international sourcing options and ensure that the balance between bulk purchasing and just-in-time delivery has been optimised. At the same time procurement processes and systems need to be reviewed to ensure demand is managed appropriately in the line of business.

Yet business leaders who do find savings are also finding it hard to sustain them, as costs have a way of creeping back into the system. How can you save a sourcing dollar today in a way that won’t force you to go out and save it again a year from now? 

How Deloitte can help

Deloitte has developed a comprehensive Strategic Sourcing and Procurement practice, offering our clients the experience and skills needed to drive down costs and improve the bottom line. Our professionals have a demonstrated track record of measurable, sustainable results because they have the knowledge it takes to identify savings opportunities across the whole spectrum from sourcing inputs to final payment (‘Procure to Pay’). We know from experience that immediate benefits can be obtained by giving close consideration to:

• Demand Management – acquiring only what the company needs, both in reference to volumes and the specifications of required services/products (benefits expected to range between 5% to 10%
• Sourcing – securing both the best fit to required business specifications and the best price available (including lifecycle cost and lifecycle value), together with the delivery of services/products on time (benefits expected to range between 5% to 20%)
• Procurement Capability – fully harvesting the benefits of sourcing through compliance mechanisms and Procure to Pay capabilities (benefits expected to range between 2% to 5%)

Deloitte’s approach, derived from both consulting and line management experience, addresses these critical challenges in unison.

In addition to our core consulting capability, the breadth of Deloitte’s service offering allows us to meet your specific needs:

• Our Audit and Risk Services practice conducts contract audits and supplier risk assessments
• Our Tax practice can help clients recognise additional savings opportunities and strategies
• Our leading Analytics team can help clients gain better visibility into supplier performance
• We can also help define the policies and controls to enforce consistency, drive supplier and buyer compliance through contracting and procurement solutions, and assess supplier risk.

Services

• Strategic sourcing
• Procurement transformation
• Low-cost country sourcing
• Procurement BPO/off-shoring.