 |
Situation
|
|
The client is a privately owned Finnish paper manufacturing company with a 2004
turnover of €1.4 billion and an annual production capacity across their global
paper mills of roughly 2.5 million tonnes.
The client's product range is focused on wood-containing and recycled fibre
based uncoated and coated printing papers, as well as newsprint. The Group is
amongst the top four paper manufacturing companies in the world for the
production of SC paper (super calendared paper) and LWC paper (lightweight
coated paper).
Over the years the client had acquired various paper mills to create the
current organisation. This led to a decentralised sourcing structure and
limited strategic sourcing activities to a few key categories, addressing only
a third of their total external spend of +€1.2 billion. The sourcing
capabilities varied significantly amongst individuals across the four regions
and were mainly of an operational/tactical nature. A clear and consistent
strategic sourcing approach across the group was missing, supplier management
activities were restricted and a long term and group wide sourcing strategy did
not exist. The available sourcing resources were stretched and a
cross-functional and cross-business approach was not evident.
Senior Management had not considered sourcing a key element to drive overall
business performance and collaboration between mills and business regions were
limited.
|
|
|
|
|
Solution
QP Group carried out an Opportunity Analysis and identified a strong business
case for change. Based on the findings, a company wide Sourcing Management
Programme was initiated to drive the required change and deliver significant
benefits to the company. The programme was focused on the following key areas:
Category Management
The total spend was divided into 20 categories. Each category was assigned to a
team leader and a cross-functional/cross-business team who, supported by a QP
Group facilitator, were tasked to deliver agreed saving targets. A nominated
sponsor provided the guidance for each team throughout the project. Education
workshops, delivered across the entire sourcing function, enabled the teams to
apply a consistent Category Management process. Utilising best practise
sourcing tools and techniques the teams developed and implemented
category-specific sourcing strategies delivering +€45 million savings.
Supplier Management
A Supplier Management approach was developed to enable the creation of
category-specific Supplier Measurement and the management of key suppliers.
Sourcing Strategy
To ensure that the benefits delivered will be sustainable, a company-wide
sourcing strategy was developed that:
-
Created a new sourcing organisation
-
Ensured appropriate focus by senior management on sourcing
-
Outlined development plans for key sourcing elements
All activities throughout the programme were enabled by rigorous Programme
Management and a strong governance model, which actively involved the client’s
senior management. This enabled a fast and successful delivery of the project.
|
|
| |
|
Benefits
-
Development/implementation of clear and concise category strategies delivering
savings of +€45 million
-
A new sourcing organisation with clear roles and responsibilities
-
A sourcing strategy with detailed objectives and activities to sustain the
initiated change programme and facilitate added value to the overall company
performance
-
Significantly improved internal communication network for sourcing across
functions and businesses
-
Risk management to address category specific issues (eg market price
volatility, assurance of supply and supply market consolidation)
-
Enhanced sourcing capability of individuals and a best practice Category
Management process
-
Standard ways of working and approaches
-
A rigorous Savings Tracking mechanism
QP Group offerings used in this case:
-
Opportunity Analysis
-
Category Management
-
Organisational Design
-
Education and Facilitation
-
Supplier Relationship Management
-
Programme Management
|
|
| |
|
