Transforming procurement in a global food business

Rapid acquisition of multiple brands across multiple markets and geographies had created a deep mistrust of centralised, top down initiatives in a global food business.

Procurement was undertaken at a local level and there was no central view across the organisation. Efficio establised a global Procurement function, delivered immediate savings and built relationships and credibility with key stakeholders - creating the foundation for significant and sustainable improvements.

Background

Our client had grown massively in recent years through multiple acquisitions. However, inorganic growth meant there was no central view of spend across the organisation, which limited identification of potential synergies. This was compounded by significant cultural and language barriers across multiple European markets, and skepticism and lack of buy-in to centralised, top-down initiatives, which meant that decision-making took place at a local level.

While a centralised procurement function existed, it was in its infancy, with significant gaps in category and procurement expertise. Another challenge facing the the Procurement team was the lack of language skills – particularly important given the company’s wide variety of cross-border operations. Efficio was engaged to help design and establish an effective global Procurement organisation, transfer the necessary skills and expertise, build the function’s credibility with the wider organisation, and identify and realise opportunities for immediate cost savings.

Approach

To meet the needs of the client, Efficio developed a flexible solution with a number of interrelated workstreams running simultaneously. This approach allowed us to achieve multiple objectives within the first six months by:

• Running an Opportunity Assessment providing a single view on spend across 46 entities, seven operating systems and seven languages. This enabled resources to be prioritised to initiatives with the highest potential for savings
• Identifying and executing ‘quick win’ projects to deliver immediate P&L impact and build confidence amongst stakeholders. We accelerated delivery of initiatives already under way to further build credibility of the global Procurement function
• Putting in place interim managers with relevant category and procurement expertise to support the existing team, along with flexible analytical resources. This helped to further enhance the visibility and credibility of the Procurement function
• Running a two week ‘road show’ to increase the visibility of the global Procurement function. This included multilingual staff to help break down existing language and cultural barriers
• Identifying key roles and skills required to build an effective global Procurement function
• Transferring our sourcing methodology and analytical capabilities to the client team. On the job training and guidance helped ensure the client had the necessary skills to continue to drive cost savings and efficiencies within the business. We also tailored analytical tools and templates to the needs of the client

Results

Efficio’s engagement helped deliver a number of benefits to the client, including:

• Immediate P&L impact of €10m annualised savings through Efficio’s Strategic Sourcing initiatives
• Acceptance and credibility of global Procurement amongst a previously highly skeptical organisation, through a targeted stakeholder engagement process, tangible delivery of savings and a tight focus on meeting stakeholder expectations
• Increased procurement awareness and knowledge amongst key stakeholders through Efficio’s bottom-up collaboration approach – making future improvements easier to achieve
• Creation of a sustainable foundation for ongoing savings through:
  • an effective central Procurement function with clear responsibilities and improved procurement, analytical and category expertise
  • a strategic approach to sourcing
  • a dynamic procurement toolkit providing full spend visibility on a pan-European level