Introduction and challenges
Procurement and cost optimization are inseparable. Managing the company’s external costs remains and will remain one of the key responsibilities of the procurement function. Nevertheless, the nature of cost optimization is changing; value generation and full costing approaches are becoming increasingly popular, whereas one-dimensional price optimization is falling behind.
Procurement departments must reinvent themselves to adopt a new perspective on costs. Consumer policies are becoming easier to manage (resulting from decisive contributions from digital technology), and supplier collaborations are increasing in flexibility. Design to value initiatives are breaking down barriers between companies and new platforms are providing added value. The widespread use of digital technology, particularly in the supply chain, is enabling a more precise assessment of incurred costs (such as non-quality, cycle time, compliance with contractual commitments, etc.). Finally, new technologies such as IoT, big data and the implementation of predictive models can provide additional optimization levers that the buyer must challenge and support.
How we can help
We support our customers in several key areas:
- Implementation of competitiveness drivers (sourcing, design to cost, consumer policy, etc.) to quickly have an impact on the P&L and generate cash
- Assessment of purchasing cost performance, target definition and business plan
- Assessment of the digital cost maturity, roadmap and support in the choice of solutions
- Implementation of a value-oriented supplier development initiative