The CEO and the Senior Management of one of the Italian leading Energy companies were committed to improve the performance of the purchasing processes, defining a new operational model and achieving significant financial benefits.
After the completion of the assessment phase, the team identified several findings of poor operating performance leading to high purchasing costs: • Unclear roles and responsibilities, especially between the Purchasing Dept. and other company functions. • Excessive number of small orders; poor use of open contracts. • Insufficient leverage of competitive bids. • Weak scouting of new suppliers.
Methodology and Approach
The project was structured in three phases along a road map, with the aim of aligning the purchasing process to best practices: • Phase 1. The team performed an assessment of the current situation, built an accurate spending map, identified some product/service categories to be tackled immediately (“pilots”). • Phase 2. For each target category (“pilot”) a cross-functional work-team was set up and a new purchasing strategy defined and implemented. • Key improvement levers have been benchmarking, full-costing, on-line competitive bidding, demand planning and aggregation, vendor list review. • In parallel to this hand-on, bottom-up approach, the overall purchasing organization, processes and tools were redesigned and re-launched. • Phase 3. The new purchasing organization rolled-out the new approach to other spending categories, with an increasingly light consulting support.