Supply Management Transformation

Business Challenges

 

Today’s companies are under a great deal of pressure due to the current economic environment. In addition to placing greater focus on top line growth, companies are looking to shore up their finances and identify new sources of value to protect margins and cash flow.

 

Purchasing functions often represent an untapped source for creating enterprise value. Yet many companies traditionally under utilize the function. Companies can spend as much as 60% of sales on purchased goods and services, and those with well-managed procurement functions can pay up to 50% less than those with poorly-managed procurement. For every $10 million in sales this could translate into additional EBITDA of $3 million.

 

Gaining control of those costs requires that companies better manage their indirect spend and overcome certain challenges that stand in the way of improved financial performance. These include:

 

  • Poor Spend Visibility – Many companies have little insight into how they spend their money. ERP and financial systems are not designed to track procurement spend. Likewise disparate data from accounts payable, ERP, eProcurement, and purchasing card systems make it difficult to obtain actionable insight into how money is being spent, and moreover into how to capture savings opportunities

 

  • Lack of Focus – Historically the procurement function has suffered from a poor reputation as a backwater function of limited strategic value. Likewise, indirect expenditures, though high in total dollar value, are generally not deemed mission critical. As a result, companies tend to place little focus on procurement, and in the process miss significant opportunities to manage their costs 

 

  • Under-leveraged Purchase Volume – Autonomous and acquisitive business stakeholders who make decentralized purchasing decisions limit companies’ ability to gain pricing discounts from consolidating spending volume with fewer suppliers

 

  • Resource Constraints – A shortage of skilled procurement people, inadequate bench strength, and position vacancies often make it difficult to effectively generate value from the procurement function

 

  • Weak Bargaining Position – Suppliers tend to know much more about their internal economics than buyers of goods and services. Without access to relevant price benchmarks and other metrics, it can be difficult to know for sure whether you are getting competitive pricing and terms

 

  • Compliance Management – Complexities in monitoring whether prices paid correspond to contract pricing and challenges in funneling purchase transactions onto preferred supplier agreements contribute in savings “leakage”

 

Capabilities

 

Axiom delivers targeted expertise and solutions to help our clients overcome these challenges and realize significant value from procurement.  We maintain a pool of more than 500 professionals with specialized industry, analytical, and spend management expertise. Approximately 70% of our resources have ten or more years of experience working in the industry of the good or service being procured. This enables us to reveal often hidden sources of value.

 

Our Procurement Transformation solutions include:

 

Strategic Sourcing  

  • Spend Analysis and Contract Review
  • Price Benchmarking
  • Procurement Strategy Development
  • Competitive Requests for Proposal
  • Vendor Negotiations
  • Contract Implementation Support

 

Procurement Process Improvement

  • Procure-to-pay process re-engineering

  • Compliance Management and Reporting

 

Procurement Performance Optimization

  • Procurement Organization Redesign
  • Job Design
  • Staffing & Recruitment

  • Training

 

Return to Services

Category Experience

Axiom has sourcing expertise across a comprehensive array of traditional and non-traditional spend categories including:

 

  • Advertising Agencies
  • Banking Services
  • Call Center Services
  • Commercial Print
  • Communications Equipment and Services
  • Consulting and Outsourcing Services
  • Contingent Labor
  • Energy
  • Energy Efficiency Systems
  • Equipment Leasing Services
  • Express Shipping
  • 401(k) Benefits
  • Health and Life Insurance
  • IT Equipment and Services
  • Maintenance Repair and Operations (MRO)
  • Office Products
  • Solar Systems
  • Structured Financing Products
  • Telecommunications Service
  • Travel

 

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