Pharmaceutical Business Case
Introduction
A global mid-size pharmaceutical manufacturer headquartered in Europe, with operations and procurement teams in North America, Europe and Asia, sought to enhance its procurement processes to drive strategic value. The organization recognized the need for a structured approach to optimize its spend and significantly reduce its costs, develop robust category strategies, and align its procurement function with best-in-class standards.
Objectives:
Spend Analysis:
Assessment of current spend and identification of savings opportunities.
Cost Savings:
Achieve multi-million savings across the direct and indirect materials.
Team Engagement:
Supporting the company’s team in analyzing spend, implementing cost-saving initiatives, and turning workshop insights into actionable strategies.
Category Strategies:
Develop and implement comprehensive category strategies.
Digital Procurement
Assessing the digitalization of procurement processes, evaluating their effectiveness, and providing recommendations for improvement.
Maturity Evaluation & Gap Analysis:
Maturity assessment and transformation plan.
Approach:
15M Maturity Assessment:
The use of 15M methodology for maturity assessment: SP1, SP2, SP3, SP4, SP5.
Cost Reduction Program:
Cut costs through spend analysis, strategic tenders, and digital tracking.
Category Management Program:
Utilized expertise to enhance category strategies with digital software.
Cross-Department Integration:
Fostered collaboration across departments to enhance procurement capabilities and strengthen alignment with organizational goals.
Results:
- Maturity Assessment: The result revealed that the company is in Stage 3 – Sourcing Expert.
- Transformation Strategy: Developed the plan to upgrade to Stage 4 – Top Class Sourcing.
- 5-Year Strategy: Created and started to implement a comprehensive 5-year procurement strategy.
- Cost Reduction: Double-digit savings through the integration of multiple cross-functional departments.
- Category Strategy Development: Designed double-digit category strategies, each approved and signed off by management.
- Process Improvements: Enhanced procurement processes through targeted workshops and the introduction of industry best practices.
- Digital Transformation: Strengthened the digitalization of the company through integrating different software tools.
Outcome:
This business case demonstrates how a structured, data-driven approach to procurement transformation can unlock substantial value, ensuring alignment with strategic goals and positioning the organization for long-term success.
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