20130619-奥纬咨询-Spending_smarter_the_untapped_value_in_sourcing_12页_336kb

SPENDING SMARTER: UNLOCKING HIDDEN VALUE IN SOURCING

Executive Summary:
Oliver Wyman reveals that optimizing external spending can significantly impact a company's EBITDA, with potential reductions ranging from 150 to over 600 basis points depending on the industry. However, most companies fail to achieve this due to common pitfalls such as narrow focus, insufficient collaboration, and a lack of sophisticated sourcing strategies.

Key Insights & Pitfalls:

1. Over-simplified Cost Cutting: Relying solely on short-term reductions overlooks long-term risks like rising prices and supplier defaults.
2. Neglecting Untapped Areas: Ignoring less obvious spend categories (e.g., IT, Marketing) misses high-value optimization opportunities.
3. Transactional Supplier Relationships: Focusing only on price squeezes neglects strategic partnerships, leading to unsustainable savings.
4. Insufficient Cross-Functional Collaboration: Cost cutting as a purely procurement-driven effort lacks buy-in from internal stakeholders like Finance or R&D.
5. Inadequate Performance Measurement: Without robust tracking, savings cannot be validated, hindering accountability and ongoing improvements.
6. Self-Supporting Initiatives: Isolated sourcing efforts fail without organizational integration and commitment.
7. Lack of Data-Driven Approach: Relying on assumptions rather than evidence reduces the credibility and sustainability of optimization.

How to Sustain Value:

• Extend Reach: Leverage sophisticated levers like price negotiation, consumption monitoring, and innovation-driven sourcing.
• Cross-Functional Operating Model: Adopt shared objectives, dynamic collaboration, and budget integration to embed savings into broader goals.
• Measurement & Tracking: Implement robust measurement systems synchronized with financial cycles to ensure long-term accountability.
• Transformation Journey: Three-phase approach: (1) Size the opportunity, (2) Build detailed plans, (3) Secure stakeholder buy-in via tools and processes.

Key Benefits:
Successful Spend Smarter initiatives deliver significant and sustainable savings across industries, enhancing profitability and enabling reinvestment in growth initiatives.

About Oliver Wyman:
Offering deep expertise in operational transformation, sourcing, and performance optimization to unlock hidden value.