Shanghai region, production company with +1.000 employees

  SYMPTOMS

  • High cost on purchasing and outsourcing.
  • Strong resistance to change/optimisation in supply chain.
  • Powerful threshold to single suppliers/partners.

  ROOT CAUSES

  • Benchmarking confirmed the threshold to suppliers to be unhealthy and expensive.
  • Suppliers have a powerful and negative influence on organisation.
  • Missing transparency in purchasing and organisation.
  • Substantial risks in contracts and documentation.

  ACTION

  • Maintain supply chain and outsourcing team during change management phase.
  • Screen, identify and implement new suppliers on major cost spend (20/80).
  • Substitution of business destructive people in purchase organisation.

  RESULTS

  • Savings of totally CNY 41.000.000/year contracted, and 50% implemented upon exit.
    • Purchases; CNY 23.000.000
    • Outsourced processes; CNY 18.000.000
  • Increasing compliance and reducing risk in supply chain.
  • Delivery assurance increased by implementing Dual Sourcing on major categories.

EXAMPLE

  • Primary commodity purchase, reduced in handling cost by approx. 70% = 18mio.