What Our Clients Say:
"A very insightful report that allowed us to target substantial procurement cost savings. Instrumental in delivering the results to the bottom line"
Peter Whitehurst,
Strategic Projects Director,
European Consumer
Healthcare Business
Buying of indirect requirements is often delegated to the functional or site based managers. Lack of specialist procurement input and low standardisation means 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:
Travel - UK Medical Devices
• Savings of over £1m (25%) • New standardised Uk travel policy • New travel agency contract with payment based on savings • Airline, car hire, taxi & hotel agreements put in place. |
Company Cars - UK Leisure
• Savings of over £500k (13%) • Single lease provider selected via e-auction with open book costing • Simplified policy with greater choice • All cost modelled based on total cost including environmental impact |
|
|
|
Marketing - UK Medical Devices
• Savings of over £2.4m (8%) • Media auditing basis for some fees • Standard ordering processes and contract management templates • Print sourced through online broker |
IT Hardware - Global Auto • Savings of £1.6m (27%) • Single source global 3 year agreement with costs based on standard indices • Global machine specifications • Online ordering and reporting |
Temp Staff - European Pharma • Savings of over $500k (14%) • New single source agreement with pan-European provider • 2nd tier agencies for specialists • Free training and induction of staff |
Legal - UK Retail • Savings of over £2m (50%) • Structured rate agreements for all approved providers • Split of simple work (to low cost) and strategic to high cost specialists • Payment by results for some types |