Procurement and Supply Chain: Establishing Global Centers of Excellence Specializing in Procurement and Supply Chain Generating Sourcing Savings of USD 120m

Situation

• Six divisions of a leading global pharmaceutical company had six supply chains and six procurement organizations which operated independently
• The global spend of > USD 1bn p.a. involved global shipments via Air, Sea, Road and Rail
• Possible solutions were to be evaluated on how to reduce spending

Solution

• Created one global supply chain procurement organization to support global tenders for several transportation modes
• Bundled volumes and implemented standard processes/tools by creating the global governance body “Supply Chain Council” for all six divisions including SCM, Procurement, Finance and IT
• Established and executed a roadmap of 20 projects to improve set-up in multiple ways including:

1. Consolidated warehouses by >50%;
2. Shifted from Air to Sea transportation;
3. Drove cross-divisional tenders;
4. Improved load capacity utilization (e.g. full truck / container loads);
5. Improved supply chain planning capabilities;
6. Implemented training and upskilling of staff

Impact

• Consolidated supplier base by >60% resulting in annual savings >USD 120M
• Higher transparency with faster and fact based decision making lifted the supply chain from tactical to strategic business partner
• Improved service levels for clients through On-Time-In-Full planning and forecasting accuracy