Diagnostic Spend and Procurement Capability in the Mining Industry
Procurement Diagnostic Project
Sustainable value created
- A review and improvement of the current purchasing way of working according to procurement best practices
- Detailed analysis of category spend with a spend reduction strategy and action plan, value €70 million per year
- Development of a governance model and category management structure aligned with the purchasing strategy
- Optimised procurement processes and digitalisation
Client Profile
A global mining company with a spend of more than €3.8 million on direct and indirect materials and services.
Project Scope
The procurement activities were mainly operational, leaving a lot of value and potential for savings on the table. The processes and supporting procurement tools were inefficient, and cross-company procurement activities were limited.
Hudicor’s Approach
The team started with a capability diagnostic to understand the current way of working, the As-Is, in order to define purchasing strategy and design the To-Be. This was done for the 8 key dimensions of procurement capabilities. 30 internal stakeholders, mainly procurement staff, were involved in the interviews and the workshops to maximise engagement. Gaps with peer companies were identified and a capability development plan was assembled to bring the procurement function to the next level of maturity.
In parallel, the spend was mapped in categories and subcategories (taxonomy), and a workable spend cube was assembled. With Hudicor’s extensive category experience and the client team’s expertise, the potential value of strategic sourcing was identified and a sourcing programme was assembled with an overall potential of €70 million annual savings.
The category management team that was to achieve this was identified.
Benchmarking current practices with best in class gave clear insights into the gaps to close and the way forward
Substantial value and savings were identified and process inefficiencies eliminated
Interested in accelerating procurement performance and savings?
