Success Story - "Cooperative Sourcing (Co-Sourcing)"

Company Description

A Large Nationwide $5 Billion Business 2 Business Hardware/Software Distributor

Company Situation and Problem

  • Client organization was experiencing significant changes and was growing rapidly
  • Data was limited and contained in several legacy accounting and operating systems
  • Procurement Resources were limited and focused on resale products and order fulfillment and expediting supplier shipments
  • Procurement had historically been decentralized and Strategic Sourcing Resources were not available or budgeted
  • Client had renegotiated some supplier contracts with limited success
  • Experience indicated that additional opportunities existed to reduce costs through more focused Strategic Sourcing Efforts

Paladin Actions & Recommendations

  • Paladin reviewed operating statements and identified several spend categories that offered immediate opportunities
  • Subject Matter Experts dug into details and worked closely with the Client personnel to complete pricing comparisons and obtain reductions and initial ‘success stories’
  • Additional Spend Categories were identified and additional contracts were renegotiated
  • Results were presented to Management and approval obtained to continue efforts
  • Paladin was engaged to be the Strategic Sourcing Partner to drive the SSI Program at Client
  • Paladin assigned a full time experienced Interim CPO to work with the Client’s Organization on the SSI Program
  • Additional sourcing projects were identified and completed as the Spend Analytics was completed

Client Results

  • A total of 32 projects were identified and completed with savings ranging from 5% to 40%
  • Procurement Data was identified, cleansed, categorized, and summarized into a Spend Cube for additional analysis
  • Significant favorable impact on operations and credibility established with management team
  • Funds approved for a permanent CPO position for the next year

Significant Reduction in several Indirect Expense Categories … Improved Quality and Service Levels … Client Friendly Contract Terms … Improved Spend Data … Improved Profitability and Cash Flow … Increased Shareholder Value