Structure of Material Group Management Indirect Material

Goal: To create cost transparency in order to subsequently define the strategy for reducing expenditure

Project

Duration: 5 weeks

Savings: 5 Initial estimate of potential of CHF 23 million

Operational area, geographical:

  • Switzerland
  • Global

Company

Type: Mechanical / Plant Engineering
Turnover: 4 Bn. EUR
Number of employees: 16,000

Description

At the main site alone, uncoordinated expenditures of over CHF 500 million were made annually.

There was little transparency as to which providers paid what amounts for which services.

Measures

  • Gain an understanding of the expenditures made within the previous year.
  • Cluster analysis of the paid invoices and allocation of these to corresponding commodity groups
  • First Big-Picture of the actual situation
  • Discussions with the users to understand the requirements and reasons for purchasing in the past
  • First potential analysis of process improvements and savings opportunities per product group
  • Prioritization of the product groups and definition of the further procedure
  • Coordination with CPO and release

Team

  • 1 Controlling employee
  • 1 Data Analyst
  • CPO

Reporting

  • Regular coordination with CPO

Interfaces

  • Controlling & Finances
  • HR
  • Production
  • Logistics
  • Purchasing
  • Development
  • Marketing
  • Facility Management
  • Legal

Success

Successful introduction and availability of material group management for the presentation and implementation of savings potentials in indirect purchasing

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