Initially, the New Zealand division of a global business asked us to recruit a senior planner to help improve its demand management. But as we soon discovered, the business relied on a central procurement function based in Australia – and a variety of problems stemmed from this.
We identified that no one in the New Zealand business had any relationships or ownership of the critical spend with New Zealand specific suppliers. The spend was approximately $50m.
We also identified that the business had no supplier database, no clear tracking of spend with key suppliers, no process for contract renewal, and no leverage on spends with suppliers.
The solution we recommended was a Specialist Procurement Manager – someone who would bring the expertise and ambition to have real impact, helping the business meet its broader strategic objectives. As this was a completely new role, we developed the position description and the key performance indicators.
In a review three months after the employment of the Procurement Manager, we saw several immediate positive impacts on the business:
- A category management plan was established.
- A close working relationship with the finance team was developed.
- Tracking of spend by suppliers was initiated.
- A contract database was established and a system for review commenced.
- Negotiations with the top 10 suppliers were initiated and a preferred suppliers process commenced.
A 12-month performance follow-up showed a clear ROI on the employment of the procurement manager. Over the 12-month period actual and forward savings post-negotiations with suppliers were approximately $5 million.
Additionally, new contracts had been implemented with telco, waste, power, stationery, vehicle and fuel providers.
This was an example of what a specialist recruitment partner can provide a business over and above just recruitment. Bringing an understanding of the functions across the value chain and the benefits of roles to business. Identifying the real problem and then solving it with the right person. Working together as partners in performance.