CASE STUDY

Procurement Outsourcing
Customer Fortune 300 consumer products manufacturer. Challenge The in-house procurement team was largely fragmented and underutilized, working within category silos. There was no clarity on service targets. This led to more than 30 percent POs being open for more than 90 days; 70 percent of blocked invoices being cleared only in seven or more days and 24 percent of supplier deliveries being delayed by more than 30 days. In addition, procurement wages were significantly out of sync with market rates. Approach GEP has strong expertise in full scale Procurement Outsourcing to ensure rationalization of resources including expertise, cash flows and management bandwidth at the CPO's disposal. From Spend Analysis and contract management to compliance and vendor performance tracking, GEP's Procurement Outsourcing solutions have a proven track record of reducing costs and improving operational efficiency. As part of the streamlining processes, GEP assumed full transaction responsibilities within an accelerated 6-week transition period. Categories involved were diverse, from high volume, low touch MRO to low volume, high touch marketing services. GEP implemented a cross-skilled team, tailored process maps and standard operating procedures for each category. Recommendations To drive competitive advantage and measurable shareholder values, Chief Procurement Officers are expected to make procurement processes efficient and drive large reductions in their spend. Enterprises are warming up to Procurement Outsourcing as a tool to drive these efficiencies. Outsourcing auxiliary processes also ensures that the in-house organization has the resource bandwidth to focus on more strategic issues. Results With flexible teams, the approach realized operational efficiencies across categories. In addition, it dramatically improved performance measured against clear targets less than 10 percent of POs were left open beyond 90 days, 90 percent of blocked invoices were cleared within seven days. The team was also able to help improve OnTime/In full Metrics (OTIF) with only five percent of deliveries taking more than 30 days. Workflows were automated with P2P tools and vendor performance was tracked through score-carding and joint process improvements. The team developed robust SLAs and reporting dashboards. With a strong focus on continual process improvement, the existing performance levels were baselined and compared against industry best-in-class.

Access our procurement resources: www.gep.com

100 Walnut Avenue, Clark, NJ 07066 | 732.382.6565 | info@gep.com
2011 GEP. All Rights Reserved.

CASE STUDY

Procurement Outsourcing
About GEP GEP (Global eProcure) is a leading procurement services firm dedicated to helping enterprises add value and reduce costs through procurement and supply chain transformation. With a comprehensive portfolio of services and solutions, GEP helps many of the world's largest organizations uncover savings opportunities, and deliver these savings to the bottom line. We have managed over $50 billion of spend on behalf of these clients, across industry sectors and geographies.

Our blended model combines management consulting, strategic sourcing support, implementation and outsourcing services with a full suite of best-in-class procurement tools and technology solutions. Our global footprint helps us to deliver these services wherever our clients need them. Headquartered in New Jersey, USA, we have offices in London (UK), Prague (Czech Republic), Mumbai & Hyderabad (India), Shanghai (China), So Paulo (Brazil) and Willoughby (Australia).

Access our procurement resources: www.gep.com

100 Walnut Avenue, Clark, NJ 07066 | 732.382.6565 | info@gep.com
2011 GEP. All Rights Reserved.