Maximizing Savings and Efficiency through Indirect Spend Management
Our client faced a significant challenge in quantifying and managing its total indirect spend across various business segments
ROI was $17M in cost savings and efficiency gains delivered by our solution.
We also identified $700 million of repeatable and addressable indirect spend, providing significant opportunities for additional cost savings.
The project took just six weeks with a total cost of $50,000 for a 10X + return.
Read on for more information on how we successfully delivered a positive outcome for our client.
Our client, the nation’s largest chain of Quick Serve Restaurants, faced a significant challenge in quantifying and managing its total indirect spend across various business segments. The new head of Supply Chain needed assistance in identifying opportunities for cost reduction, developing a business case for centralizing the management of indirect spend, and defining the organization and infrastructure required to manage indirect spend sustainably. Our client needed to quantify the value of Indirect Spend by spend category and business segment and prioritize opportunities for cost reduction and value generation by leveraging spend.
We developed a comprehensive solution to help our client manage its indirect spend effectively. Our solution included:
Spend Analysis: We analyzed our client’s AP spend data for Corporate and company-operated stores, segmented spend by supplier and spend category, and reviewed key contracts to evaluate pricing, contract scope, and terms and conditions. This enabled us to quantify the value of indirect spend by spend category and business segment.
Organizational Assessment: We determined the organizational capabilities required to manage indirect spend sustainably and developed an organizational design to support the solution.
Opportunity Assessment: We identified opportunities to reduce costs and improve supplier performance and developed sourcing strategies to achieve cost reduction. We prioritized opportunities by value, impact, and ease of implementation.
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