Indirect Procurement The external spend on indirect goods and services, which often represents between 25% and 40% of a company’s total revenues, is often overlooked. Crimson & Co improves the cost base by working with clients on strategic sourcing activities in high impact indirect categories.
Buying of indirect goods and services is often delegated to functional or site based managers. Lack of specialist procurement input and minimal standardisation mean there are significant leverage opportunities. Indirect categories range from simple office supplies and IT hardware to more complex categories such as marketing, professional services, fleet and travel. Crimson & Co uses an approach based on category teams with structured processes and market knowledge to deliver lasting change that reduces the cost base over the long-term.
Experience on a wide range of assignments means that Crimson & Co expects the results on a cost reduction project to be between 7% and 15% of targeted expenditure. These are a mixture of supply side (price reduction) and demand control (specification challenge and standardisation).
These differ by category, typically driven by complexity, previous focus and competitiveness from suppliers. Examples include: