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 Results - Procurement - steel (2)

An integrated steel maker asked PIP to create a procurement savings program. The initial high level diagnostic identified 8 high priority categories with potential savings of approximately $60m including both large spend categories (Maintenance Services, Maintenance repairs, Machining & Fabrication and Facilities Services) and 'quick win' areas such as By-Products and Printers. The programme was staffed with full time resources (mainly client resouces) with end users involved in cross-functional network teams. PIP led the program putting in place the systems, processes and reporting required to sustain the program across multiple sites. PIP also led work in several of the key categories and trained the client team as needed, running monthly training sessions as well as on-the-job coaching.

PIP and client achieved:

The team tackled 60% of the spend that was in scope. In eight months they had locked in $20m of savings with an additional $56m in implementation.






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What we did:

Total value of ownership driver trees

Reverse engineered suppliers’ costs

Consolidated spend

Identified alternative vendors (including insourcing)

Reviewed bundled and unbundled offerings

Synthetic pricing

Root cause analysis to reduce usage

Identified substitutes

Tenders, multi-rounds negotiations, open book negotiations

Set up supplier KPI measurement, reporting and tracking


 
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