Transforming from a transactional low cost mind-set to a value-creation mindset.

Challenge

The company is a global player and industry leader in the building materials industry competing in an oligopolistic environment.

A major global disruption forced the company to reinvent and transform across all business areas. The Procurement team, along with the Commercial teams had to step up their game. The mandate was to stay in business now, and to emerge from the global crisis with a competitive edge over competition.

Approach

Conventional wisdom for procurement is no longer adequate in the new environment and economy. The old paradigm of lowest cost, efficiency from vendors, and transactional relationship has become grossly inadequate in dealing with the increasingly complex external environment. The new over-riding strategy was to create value. A three-prong strategy was deployed to reinvent and transform procurement.

This included:

Developing strategic partnership with key vendors in place of transactional relationships.
Developed domain sourcing expertise across all strategic categories.
Digitization of the procurement processes throughout the organization.

BACK

Outcome

Through this transformation we were able to reposition Procurement as a strategic business partner, contributing as a growth driver and driving competitive advantage.

Strategic vendor partnerships were forged for a stronger commitment to collaboration and innovation for the future. This ecosystem of partners created a unique competitive advantage for the business.

A category sourcing approach created deep domain knowledge in all strategic categories, facilitated by meaningful in-depth discussions with the business, resulting in business-centric solutions more quickly.

A data driven culture started to take shape. Decisions became fact-based and this in turn increased the Procurement function’s ability to serve internal customers more accurately and timely.