Worldwide Strategic Sourcing Analysis

A client operating 250+ global production and sales sites faced a disjointed approach to managing their $5MM annual office supplies budget. Numerous major global suppliers and many local vendors were used inconsistently across the varied group of companies.

The LVP team of strategic sourcing experts reviewed the client’s office supply expenditures, vendor list, active contracts, and specific location needs. To gain deeper insights, the team:

• Visited top-spending sites to assess their distinct requirements and service expectations.
• Deployed surveys to all other locations to capture input for the final sourcing strategy.
• Focused on high-volume, standardized catalog items such as office supplies, paper, and toner.

To realize overall cost savings, LVP Consulting launched a Strategic Sourcing initiative targeting office supplies with an annual spend of about $4.9 million. LVP then:

• Collected and consolidated AP data from 35 operating companies covering 250+ locations.
• Obtained and organized line-item purchase data from around 100 individual sites.
• Created customized market baskets (hotlists) for each country in North America, Europe, and Asia where the client operated.
• Developed a pricing model and quote package for non-market basket (off-list) items to handle unique supplier pricing structures.
• Negotiated final contracts with each major global office supply vendor, emphasizing lowest total cost. Discussions included implementation incentives, volume rebates, payment terms, delivery, cost reduction programs, and pricing.
• Coached the client team on Strategic Sourcing, Executive Communication, Negotiations, Executive Interviewing, Supplier Due Diligence, and Alliance Management to ensure lasting change.

Significant cost savings and service enhancements were achieved by utilizing the client’s global footprint.

• Achieved $1.5 million (31%) in annual savings and consolidated the supply base to a single global provider for all office supply needs.
• Implemented pricing stability measures for highly volatile categories like paper and toner.
• Appointed an executive liaison with the awarded supplier to oversee the relationship and ensure success.
• Created a standardized data reporting and tracking process with the vendor to monitor compliance and savings.
• Established an alliance management review system to maintain ongoing partnership success.