Background:

A $2B distributor of gas products engaged PPT Consulting to provide strategic sourcing for 3 commodity contracts and establish a repeatable Procurement Process based on Best Practices. Contracts were up for renewal and due to commodities index contract pricing was expected to rise. Our client challenged us to move pricing in the other direction. In addition the company was striving to instill a culture of cost effective procurement, and thus the client wanted to ensure knowledge transfer to their Procurement Department as well so that that future sourcing initiatives could benefit from the techniques introduced by PPT.

Goals:

  • Identify commodity sourcing savings for the 3 commodities in scope.
  • Develop a repeatable Procurement Process based on Best Practices.
  • Train client personnel on Best Practice Procurement Process to enable their execution of future strategic sourcing.

Accomplishments / Benefits:

  • Identified aggregate savings of 10% ($5MM) across all 3 commodities.
  • Established a Procurement Process and developed a detailed handbook for client use.
  • Established the standards and tools by which subsequent sourcing initiatives were to be completed.