Challenges
Procurement organizations are playing a more strategic role than ever before, helping companies achieve and sustain a competitive advantage by keeping costs low, providing goods and services efficiently and effectively, and drawing on the innovation and quality insights of suppliers. Their key challenges include balancing risks and savings, finding and training the right people, and operating in a global environment. To succeed, companies must answer questions such as these:
What are the critical skills that procurement organizations need today?
How can we lower procurement costs without hurting supplier relationships?
What skills and best practices lead to success in global sourcing?
How can companies manage commodity risk in today’s volatile environment?
How can procurement work more effectively with other key functions?
How can procurement expand beyond a cost-savings mindset to include a focus on adding value?
BCG Competencies
Well-designed sourcing initiatives can generate substantial savings—up to 15 to 20 percent of a company’s purchasing costs. We work closely with our clients to deliver and sustain those cost improvements, improve cross-functional collaboration, develop new capabilities and more streamlined processes, and build stronger, more productive supplier relationships.
Our primary areas of focus include these seven topics:
Strategy Development. BCG works with its clients to ensure that the strategy and approach of procurement are aligned with corporate strategy and positioned to deliver the maximum value.
Category Sourcing Strategy Development. We help our clients create and implement strategies for cutting costs across all their purchasing categories.
Global Sourcing. We help organizations reduce costs by developing the right skills, establishing new processes, and understanding local customs and suppliers.
Supplier Relationship Management. BCG shows companies how to draw on suppliers as a valuable source of innovation and how to involve them in rethinking all costs along the value chain.
Commodity Sourcing. BCG can help establish strategic sourcing programs that ensure an ongoing supply of key inputs at the lowest possible cost.
Supplier Payment Management. We help our clients improve their cash flow by reviewing and rethinking supplier-payment policies and processes.
Organization and Change Management. BCG’s proven expertise in this area ensures that the right capabilities, governance structures, and metrics are in place to drive real, sustainable change.
By drawing on its global network of more than 120 procurement experts, BCG can help companies develop a customized plan to generate significant savings quickly.