Case Study: Procurement Assessment

Client Overview

• A global company that designs, manufactures and markets a broad range of niche products for industries such as energy, agriculture, lawn and garden, mining and construction equipment, aerospace and electronics, dining and food delivery, healthcare, and more.

Challenge

• Company has five distinct business units (BUs) that operate autonomously. There is very little corporate oversight and no unified procurement strategy.
• Company's board of directors wants to improve supply base and raw material management through improved procurement practice.
• Procurement is primarily seen as an administrative function, decentralized in each business unit.
  

Tompkins’ Role

• The five-week assessment included visiting each division, assessing their functionality and capabilities, and making an actionable recommendation that fits the company's culture and aligns with their operating philosophy.
• Provided detailed analysis of potential areas for cost savings and improved operations margins.
  

The Results

• The assessment concluded that the company needed to reorganize the procurement function into a hybrid organizational model in which direct materials are managed within the BUs and indirect categories are managed more centrally.
• Developed a detailed implementation plan, which included strategies for executing the plan at a slow, medium, or fast pace.
• Formed a center-of-excellence approach to strategic sourcing and negotiations management to enhance the internal skills of the procurement workforce and capitalize on potential cost savings of $150M.