Procurement Transformation

Procurement addresses expenditure in capital, goods and services, which can represent a significant portion of corporate turnover. It is one of the most effective ways a business can bring down costs, deliver smooth operational and back-office processes and secure vital partner-supplier relationships.

PwC Procurement cycle

Your challenges

1. Find the money

  • Expenditure(s) not visible
  • Poor Data quality
  • Contracts not in place
  • Volume not aggregated across divisions/businesses
  • Inconsistent specifications
  • Large supplier base
  • Local vs. centralised buying
  • Low profile of procurement
  • Transfer Pricing (TP), direct and indirect inefficiencies (incl. compliance)

2. Get the money

  • No leveraging of group purchasing power
  • Lack of consistent processes
  • Strategic sourcing of indirect and direct procurement not fully leveraged
  • Best practice procurement practices / tools not applied
  • Poor buying / negotiation skills

3. Keep the money

  • No alignment of procurement responsabilities (incl. TP and tax)
  • Limited change management
  • Minimal contract management
  • No formal supplier management process
  • Procure to Pay process not supporting compliance
  • Non-compliance with group deals
  • Limited technology support
  • misaligned KPIs

What is at stake?

1. Procurement analysis
2. Strategic sourcing
3. Procurement infrastructure
  • Determine and categorise spending.
  • Analyse by business, supplier, category, location
  • Conduct true analysis of buying power.
  • Analyse and understand business requirements
  • Understand market opportunities
  • Identify potential suppliers
  • Negotiate new deals
  • Align people, processes and organisation
  • Identify and implement performance indicators
  • Implement the right tools and technologies

How we can help

Find the money

  • Expenditure analysis & benchmarking
  • Value chain review
  • Contract review
  • Review of payables and receivables (Cashfinder)
  • Procurement effectiveness assessment
  • Category opportunity assessment
  • Risk assessment
  • Tax and TP process assessment

Get the money

  • Definition of business requirements
  • Strategic sourcing
  • Application of best practice procurement tools (e-auctions, value engineering, low cost country sourcing)
  • Partnering
  • End-to-end supply chain design
  • Working capital reduction
  • Implementation of optimised tax and TP model

Keep the money

  • Procurement organisational design
  • Procurement function effectiveness (skills, processes and systems)
  • Procure to Pay implementation
  • Supplier relationship management
  • Change management for process and system implementation
  • Cultural alignment
  • Compliance framework design (incl. TP and tax)
  • KPIs and benefits tracking

Contact us

Frédéric Chapelle

Advisory Partner, Technology, PwC Luxembourg

Tel: +352 49 48 48 4185

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