EMT SCM helped to save 1.5 Bn USD cost by smart category management for a Retail Chain organization and enhanced strategic sourcing.
About Customer
The customer is US leader in Office Supplies, Computers, Electronic Goods, Printers, Furniture’s across NA, selling by Brick and Mortar shops, online and B2B channel. The diverse product/SKU is around 25K+, the customer also provide Marketing and Design Services. Customer has 1400+ stores and sells broad range of products through e-commerce as well as Business to Business sales organization.
The Challenge
Customer requested EMT SCM experts to cut down the cost of non-moving product and competitive new suppliers to reduce the cost of operation by 10% through strategic sourcing, category management and elimination non-moving product SKU. The suppliers are across the world, it was a complex exercise for the customer to execute the mission critical assignment. Also identifying new supplier and negotiating price and lead time to supply to the store is challenging task.
Also 500 RFP’s to be executed with suppliers in one year period timeline to achieve 10% cost saving.
The Objective
Ensure 10% cost saving within one year period through Strategic Sourcing, Contract administration
Faced with these challenges, our client’s objective was crystal clear: ensure seamless to achieve 10% of cost saving by identifying new suppliers to bring competitive price in the stores without any disruption to the business continuity and eliminate non-moving parts by bringing Category Management to achieve the goal of 1.5 Bn USD cost saving
The Solution
Smart Category Management and Contract administration, supplier negotiation and eliminating non-moving nonstandard SKU from the stores.
To achieve the customer expectation of 10% cost saving and elimination of non-moving from brick and mortar stores and e-commerce environment, EMT SCM experts took up the initiative. The program was phased to 6 stages.66000 SKU across 96 categories has been clearly planned to work out by analysing the existing data. This has been remotely handled from offshore, created SWAT team of 14 members and the categories been assigned to 14 Leads. In the period of one year 500+ RFx’s has been executed and contract has been finalized to achieve 1.5 Bn USD target, where the actual savings realised was 1.77 Bn USD.
In Scope Activities
- Consolidation of Spend analysis
- Identifying potential new supplier
- Roll out of RFQ and RFX
- Final Bid assortment and negotiation
- New vendor on boarding through contract administration in Oracle and RangeME
The Impact
1.77 Bn USD saved as against of targeted 1.5 Bn, eliminated non moving SKU.
Our solution had a significant positive impact on the client goal. Since inception, we achieved a remarkable 117% performance which led to great customer satisfaction within the defined period of 12 months. The approach that we adopted has become model for the customer to follow in future with respect to spend analysis technique and RFX management model which was brought by EMT SCM.
Our case study stands as a testament to the power of strategic SCM optimization and procurement solution on Strategic sourcing and Contract management in line with unwavering focus on customer needs, resulting in unparalleled execution and client satisfaction.
