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A large building materials company, utilises a range of procurement and sourcing intelligence services CASE STUDY thesmartcube.com
A large building materials company, utilises a range of procurement and sourcing intelligence services
C A S E S T U D Y
thesmartcube.com
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C A S E S T U D Y
Business Challenge
The Smart Cube has a longstanding relationship with a large building materials company, providing a range of procurement and sourcing intelligence services.
Following an acquisition, a newly appointed CPO faced the challenges of realigning the company’s procurement strategy to its parent entity, and delivering higher cost savings across the merged businesses.
The Smart Cube solution
The Smart Cube was tasked with delivering a rapid assessment of supplier information across all categories, to provide visibility of the existing supply chain and spend, as well as insights into the procurement operations and processes.
The first challenge was sourcing the required information: spend and contract details resided with individual category managers, and was not available on a single central system. With information stored across multiple platforms, from email accounts to Excel spreadsheets, it was impossible to identify critical factors such as areas of highest spend, contracted/non-contracted spend, contract compliance etc.
The company’s internal Purchase Order system was used as a starting point for accessing relevant information, and gaps were filled from other platforms. The Smart Cube’s proprietary algorithms were used to clean and harmonise the data set, which totalled over 1 million lines of data, covering more than £1bn of spend.
Spend line items and suppliers were categorised in various buckets and mapped to the spend tree, then information was revalidated with category managers, before being analysed to create a detailed view of data by spend, category, and category manager.
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C A S E S T U D Y
Value delivered
Brand new insights to inform strategic decision-making: The CPO had a number of immediate challenges to address as a result of the acquisition, and the spend analysis was an absolutely critical requirement to inform the right decisions to meet the objectives. Beyond immediate needs, the analysis and insights formed the basis of a new category management strategy, which created a more strategic procurement function.
Improved long-term planning: As well as addressing the original spend visibility challenge, the solution was future-proofed, as the data and analysis process could be updated and scaled up. This
enabled better control and planning in the long-term, as well as identifying short-term actions.
Ongoing advice from experienced analysts: Having gained understanding of the company’s procurement operations and objectives, The Smart Cube team was able to provide ongoing advice to drive efficiencies and improvements. Flowing from the initial exercise, the analysts supported a multi-country travel tender and a logistics supplier analysis, and recommended a contract review across all suppliers.
Results
The Smart Cube’s exercise generated a holistic picture of the company’s buying activities –the first time this information had been available to the procurement team.
But knowing that data in itself is of little value, The Smart Cube team filtered the findings to provide the information most relevant to the CPO’s objectives and KPIs. Tableau visualisation software was used to present the key findings, including spend by transaction value, by commodities, by suppliers, and by sourcing managers.
The CPO was delighted with the results, which identified where efforts should be focused
to make an immediate difference to sourcing and buying practices, supplier management and procurement operations. The commodity spend heat map was highlighted as being of particular value in terms of illustrating quick wins to deliver cost savings.
Other decisions enabled by having visibility of spend data included changes to the procurement team structure, reassigning spend categories, and the development of a new category management strategy.
thesmartcube.com
United KingdomNo 1. Farriers Yard77 Fulham Palace RoadLondon W6 8JAUnited Kingdom
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RomaniaFloor 5, Entrance B,2 Martin Luther Street,Timisoara, 300054Romania
IndiaLevel 5 Tower BWindsor IT Park A1Sector 125 Noida 201301India
The Smart Cube is a global provider of research and analytics solutions, primarily serving the CPG, financial services, retail, life sciences, energy and industrials sectors.
Addressing the needs of businesses in the intelligence age, our customised solutions provide a truly connected approach, delivered by talented minds and strengthened by Amplifi, our organisational intelligence platform, rich with knowledge, cutting edge tools and advanced analytics.
We work with a third of companies in the Fortune 100, helping them make smarter decisions, accelerate value and gain a competitive edge.
Headquartered in the UK with additional offices in the USA, Switzerland, Romania and India.
Intelligence. Accelerated.
