Supplier Aggregation Programme and Strategic MRO Sourcing
Strategic sourcing in several MRO categories
Sustainable value created
- Long-term contracts with the strategic suppliers and reduced number of suppliers
- €1.3 million in price and spend savings and additional TCO savings of €0.7 million were realised. This resulted in total savings of over €2.1 million, representing a 23% reduction of the total scope spend
- Mapped product requirements with technical team to ensure that quality needs are met and to improve future data quality
Client Profile
A sand mining company that is one of the world’s leading material solutions providers with over €2 billion in sales.
Project Scope
The project scope covered all spend related to maintenance, repair, and operations (MRO). As the company has targets to cut costs by 3% annually, the sourcing strategy was mainly RFP-driven without good insights into internal needs and supply market complexity.
The strategic sourcing project covers 6 MRO topics: mechanical parts (incl. handtools and PPE), electrical parts, workwear, pumps, lubricants, and compressors.
Hudicor’s Approach
We began by executing the sourcing projects in the 6 selected pilot categories. We started with an internal analysis of each spend category to map the global spend and requirements. Following that, we could conduct an external market analysis. The data from these analyses served as the basis for the development and implementation of the sourcing strategy (RFx of FBN).
Towards the end of the project, cross-country synergies were realised via consolidation. Due to poor data quality, we had to conduct extensive workshops and interview the technical teams to achieve standardisation. We successfully trained the technical team and procurement staff in the best practices, leading to €2.1 million savings (23%) annually and fixed contract prices for 15 months.
€1.3 million in price and spend savings were realised on a €9 million spend.
Additional TCO savings and TCO reduction commitments of €0.7 million were realised.
Interested in accelerating procurement performance and savings?
