Alliance Procurement Solutions Adding Value and Delivering Huge Working Capital Savings

May 25, 2017

 

Alliance Procurement Solutions has been working with a major globally recognised brand on various initiatives to support the business growth and objectives.  One key workstream changed shape and added value due to the forensic work undertaken by Alliance Procurement Solutions.

 

Originally tasked with running an e-auction event, I started the process of engaging with the stakeholders to identify the requirements, forecast volumes and current stock levels.  Annual spending on this category of products was £1m.

 

The specification requirements remained as they were previously which simplified the deliverable for all parties.  I also got an understanding of the historic forecast volumes.  I worked closely with finance and the field operations team to identify forecast volumes, and logistics to understand the forecast volumes they are working to and to establish the order patterns, which also included the quantities being ordered.

 

Numerous meetings were held with stakeholders, and I also met with potential suppliers to understand their challenges and outline my clients expectations.  Initial findings identified that the client may have been over ordering, as significant volumes of stock were available, but another level of detail was required to understand this further.

 

The results of this deeper dive identified that some stock was indeed unusable, and therefore reducing the overall usable stock availability.  However, when this was matched against the volumes currently on order and then matched against forecast requirements, it highlighted that most products had excessive amounts of stock; in some instances over a years worth of stock.

 

The root cause analysis highlighted that this was caused by a disjointed approach across functions, (finance, logistics and operations).  Alliance Procurement Solutions brought all of these parties together and shared the data.  

 

The outcome of the meeting was that a new cross functional meeting would take place quarterly to review all data points and agree re-order points; excess stock would be run down by not ordering new products, freeing up working capital and avoiding spend, the impact of which over a year saved £0.5m; 50% of annual spend.  

 

In addition to this, suppliers had indicated a price increase due to worsening exchange rates and this was therefore also avoided.  The e-auction event postponed for over 6 months but this also provides new suppliers to be identified and increase the balance of power within future negotiations/e-auctions.

 

If you are facing working capital pressures or would like Alliance Procurement Solutions to work with you to identify opportunities then please do get in touch for a free no obligation discussion and quote.

 

Contact: Mark Wood

Email: info@apsuk-ltd.com

Call: 07515 003472

 

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