What is Procurement excellence?
What a company buys is often one of its largest cost lines and, at the same time, one of the least managed. Procurement excellence turns spend into a strategic lever: more transparency, better terms and less supply risk.
We start by understanding where the money goes. We classify spend, define a strategy by category and support supplier negotiations with total-cost analysis, not just price.
Savings are recorded against a baseline agreed with finance, so that the board sees what was captured in the income statement and not just in the negotiation.
The problems clients bring us
Do we really know what we spend on?
Spend scattered across areas, suppliers and systems, with no consolidated view by category.
Do we negotiate on price and lose on total cost?
Purchasing decisions that don’t consider logistics, quality, inventory or payment terms.
Do we depend too much on a few suppliers?
Critical categories with a single supplier and no plan for supply disruptions.
Are negotiated savings not showing up in the results?
Savings reported at the negotiation stage that finance can’t find at closing.
Is procurement an operational rather than a strategic function?
A team that processes orders instead of managing categories and supplier relationships.
Is indirect spend escaping control?
Services, maintenance and overheads contracted without process or comparison.
Our approach, applied to Procurement excellence
The same four phases of «Our approach», with what we do and what we deliver in each one.
The path of a procurement program
- 01Consolidate spendProcurement data from all systems in a single view.
- 02Segment categoriesBy spend impact and supply risk.
- 03Negotiate on total costStrategy and negotiation plan for each prioritized category.
- 04Record savings with financeSavings against a baseline, traceable to the results.
We use a problem-solving structure to frame hypotheses.
We consolidate procurement data from the different systems and classify spend by category, supplier and area. Interviews with procurement, finance and internal users complete the picture.
DeliverableSpend treeWe break the problem down into a MECE structure.
Categories are segmented by spend impact and supply risk, and for each segment lever hypotheses are defined: consolidate volume, renegotiate, specify better or develop suppliers.
DeliverableCategory segmentationWe build the business cases and the structure of each initiative.
Each prioritized category has a total-cost analysis, a sourcing strategy and a negotiation plan with objectives and alternatives.
DeliverableCategory strategyWe provide support with a dedicated, full-time on-site team within the organization.
We support the negotiations and record the savings against the baseline agreed with finance, with follow-up until they are reflected in the results.
DeliverableAuditable savings
What does the diagnosis review?
Spend cube
- Consolidated spend
- 01CategoryWhat do we buy and with what trend?
- 02SupplierWhom do we buy from and how concentrated is it?
- 03AreaWho buys and on what terms?
- Spend transparencyWhat is bought, from whom, on what terms and with what trend.
- Category strategyHow each category is sourced according to its impact and risk.
- SuppliersSupplier base, concentration, performance and relationship.
- Purchasing processFrom requisition to payment: controls, lead times and compliance.
- Organization and rolesStructure of the function, capabilities and relationship with the business.
- Data and toolsQuality of procurement data and support systems.
How is spend managed?
Spend is broken down in a tree until it reaches manageable categories, and each category is given a strategy according to its impact and supply risk.
Spend tree
- Direct spend
- Raw materials and inputs
- Packaging and components
- Indirect spend
- Services and maintenance
- Technology and overheads
- Logistics
- Transport and distribution
- Storage
- Investments
- Equipment and works
- Capital projects
Category segmentation
What stays in your organization
- Spend tree
- A consolidated view of spend by category, supplier and area that can be kept up to date.
- Category strategy
- How to source each prioritized category: levers, target suppliers and negotiation plan.
- Auditable savings
- Savings measured against a baseline agreed with finance and traceable to the income statement.
- Supply risk map
- Critical categories, supplier dependence and contingency plans.
- Procurement operating model
- Roles, processes and policies to manage categories on an ongoing basis.
Where do we apply it?
Led by Benká Consulting, with the rest of the holding when the challenge calls for it.
