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Project

Set up global centers of excellence for procurement and supply chain; generated sourcing savings of USD 120m

Read Time
2 minute read

Situation

  • Six divisions of a leading global pharmaceutical company had six supply chains and six procurement organizations which operated independently
  • The global spend of > USD 1bn p.a. involved global shipments via Air, Sea, Road and Rail
  • Possible solutions were to be evaluated on how to reduce spending

Solution

  • Created one global supply chain procurement organization to support global tenders for several transportation modes
  • Bundled volumes and implemented standard processes/tools by creating the global governance body “Supply Chain Council” for all six divisions including SCM, Procurement, Finance and IT
  • Established and executed a roadmap of 20 projects to improve set-up in multiple ways including:
  1. Consolidated warehouses by >50%;
  2. Shifted from Air to Sea transportation;
  3. Drove cross-divisional tenders;
  4. Improved load capacity utilization (e.g. full truck / container loads);
  5. Improved supply chain planning capabilities;
  6. Implemented training and upskilling of staff

Impact

  • Consolidated supplier base by >60% resulting in annual savings >USD 120M
  • Higher transparency with faster and fact based decision making lifted the supply chain from tactical to strategic business partner
  • Improved service levels for clients through On-Time-In-Full planning and forecasting accuracy