Case Study:

UK bank targets savings and supplier consolidation in the tail.

 

Client

A new disruptive force in UK banking formed by the merger of three financial brands to form one bigger, brighter and better bank.

The Challenge

With a combined supply base and a goal to deliver synergy benefits from the merger, Procura support was needed o focus on the supply base.

The objectives were three-fold;

Firstly, deliver savings

Secondly, consolidate the supply base and,

Thirdly, ensure contract compliance and ongoing management.

Approach

The first step was to create complete visibility into the newly combined supply base. ProIntell was used to extract, cleanse and combine spend data from the legacy systems and, for the first time, provide transparency of spend.

The spend analysis provided clear insight into the supply base, segmenting strategic suppliers and the long tail. And, with almost no duplication of supply base, it was a very long tail.

 

Cost reduction chart

Analysis allowed for the scoping of a rage of procurement initiatives; focusing the client’s procurement resources on the top 20% of suppliers whilst scoping a tail spend initiative to target the remaining 80%.

A targeted “top of the tail” programme prioritised higher spend suppliers for savings delivery whilst the remaining lower spend suppliers were targeted for aggregation and consolidation.

The approach was supplier-by-supplier; identifying which strategy could be executed; consolidating into preferred suppliers, aggregating spend through consolidation, agreeing new terms with critical suppliers and ensuring each selected supplier was re-contracted and managed going forward.

Results

  • Client procurement focused on top supplier programme
  • Top of the tail initiative delivering savings >10%
  • Tail spend supplier consolidation
  • New terms agreed with selected suppliers
  • Re-contracting into contract management process/management

 

Team focus chart


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