Harmonization in category planning maps the road to a healthy $165m+ savings

Vision

Serving society

For a large pharmaceutical company, an ambition to operate faster and reduce its costs to society, meant unlocking millions of trapped value within $2.1bn of spend. Its Direct Procurement (DP) team needed to improve how it partnered with the business and worked across categories to deliver a step change in procurement productivity.

Challenge

Misalignment and working in isolation

Procurement leaders had analyzed spend categories and identified potential spend reduction across contract manufacturing, chemicals, logistics, and packaging. But with opportunities ranging from pricing renegotiation to broadening the supplier base, it needed its category teams to roadmap execution, set up robust governance structures, and engage across functions and stakeholders to accelerate savings realization.

But a lack of transparency and consistency in category planning, left the teams struggling to validate and prioritize savings initiatives and implement continuous cost management measures that would deliver sustainable value. 

Each worked in their own category silo. Not connecting the cross-category and cross-functional dots to realize the big vision of the collective potential savings and improvements in efficiency, security of supply, supplier relationships, and customer service. Unable to unlock the true power of procurement, the uncertainty spread to their common business partners creating a barrier to buy-in and cross-functional collaboration.
 

Solution

A prescription for productivity

To successfully launch the spend reduction program and realize substantial savings within 6 months, the Global Head of Procurement turned to Genioo for targeted support to harmonize category plans and build the teams’ ownership and confidence in driving change.

We interviewed key stakeholders across procurement leadership and categories, to identify the obstacles and strengths in its processes, people, and platforms on the path to realizing the vision. And with these insights to hand, we designed and facilitated a workshop to anchor the team on a common set of goals and align on the way forward. Everyone had a voice in discussing the issues and co-creating the solutions to secure buy in and embed change. And it deepened clarity and appreciation across the board of cross-functional and cross-category challenges for better working relationships. 

We worked with the teams to co-shape new ways of working and supported them in mapping out roles and responsibilities and recalibrating category management tools. Improving spend transparency and generating easy-to-consume insights enabled the teams to find ways to boost procurement productivity and value generation. 

Reigniting teams with insights

A heat map of spend vs. opportunity gave the teams clear oversight of potential cost savings. It deepened the team’s understanding, belief, and ownership (UBO) of the significant impact they could make. And sharing our expertise and best practices to review and update category plans, identify benefits beyond cost, and develop the supplier landscape, spurred the team on. 

Confidence across categories

A coaching exercise pitching category plans to each other, worked two-fold. First, teams understood each category plan, the interdependencies, and how to work better together. And second, it built confidence in talking through plans and demonstrating robust rationale, empowering the teams to secure cross-functional buy-in and collaboration.

Fit for handover

Following our top team alignment methodology, the teams championed their category plans with product teams and leadership for executive sign-off. From here, they co-created a detailed execution roadmap aligning on functional needs and actionable KPIs. 

With training in net savings tracking, negotiations preparation, and deployment of robust program governance, the teams were in excellent shape to fully take over and drive the spend transformation. 

Impact

Connected category management

• Produce and pitch 15+ detailed category plans with quantified impact to lock in cross-functional collaboration and executive buy-in. 
• Drive the 6-month spend transformation program to deliver a potential $165m+ savings.

The new ways of working helped to break down barriers and set the team on the path to category management excellence and a healthier financial future.