Client realized annual savings in excess of $20 million (21%), developed a low cost sourcing strategy in conjunction with an International
Procurement Office (IPO), and upgraded the skill- level of over 130 professionals by receiving over 80 hours of training in negotiations, sourcing methodology, executive interviewing, supplier due diligence and alliance managements.
Improved long-term pricing stability by implementing programs to proactively manage commodity pricing.
Obtained engineering support for New Product Development as well as Product Rationalization.
Client lacked a consistently applied strategic sourcing process, had not leveraged low cost sourcing options, faced pricing pressure from competitors, and its workforce lacked the required skill sets and had not received formal training to address future challenges.
The Gibson team gathered and analyzed the client’s supply base, customer requirements and annual material and service spends. Potential savings opportunities were uncovered and various technical and organizational issues impeding cost-effective performance were identified. Specifically, the Gibson team:
The Gibson Team:
To achieve total cost savings, Gibson Consulting implemented a global Strategic Sourcing project targeting twelve specific categories: Iron & Aluminum Castings, Gears, Electrical Wire Harnesses, Fittings & Hoses, MRO & Production Supplies, Forgings, Machined Components, Fabrications, Fasteners, Oil and Air Filters, and Generators. Gibson then:
Cost savings were achieved by reducing the client’s supply base and significantly improving alliance management. Ongoing cost reductions will be sustained by new organizational structure, which has increased the awareness of sourcing issues among management.
