Procurement

With more than 930 procurement projects completed across industries and geographies over the past five years, BCG’s procurement consulting experts know how best to help teams chart a course to buying differently—and better. They blend deep sector-specific knowledge with expertise in procurement best practices—both traditional and new—as well as digital transformation.

Creating Value Requires Enablers and a Strong Data Foundation

Building relationships remains important to sourcing and procurement, but personal experience must be balanced with a rules-based process that uses digitization to speed outcomes and reduce costs. To implement an effective digital procurement strategy—and take full advantage of the opportunities that digital offers—BCG helps sourcing and procurement leaders define the core value that their function brings to the organization.

To identify the investments needed to create value—through increased savings, quality, speed, innovation, sustainability, and risk mitigation—we examine your organization’s strategic priorities and assess its digital maturity.

Using our extensive library of client use cases to speed our work—and tapping into the complementary capabilities of Inverto, a BCG specialty business that focuses on procurement and supply chain management—we then select and run use cases that match your specific needs. The results help pinpoint technology interdependencies and anticipated pain points, which in turn helps shape your custom digital roadmap. To turn that roadmap into reality, we work with BCG GAMMA to select the right digital solutions and BCG Platinion to guide broader deployment.

Using AI to Build Needed Supply Chain Resilience

Procurement’s role in driving a company’s overall performance took on greater urgency in the wake of COVID-19. The pandemic exposed structural flaws in supply chains, making resilience a top priority—even if it leads to extra costs.

Our AI Supplier Risk Monitor tool gives us the end-to-end supply chain visibility needed to proactively identify risks and devise solutions, such as adding backup capacity for production and distribution or re-optimizing inventory. This visibility also clarifies options for diversifying your manufacturing and supply networks; one common solution is to create regional manufacturing and sourcing footprints that are located closer to end markets.

The New Pareto: Focusing on Suppliers Instead of Categories

To deliver value through savings, CPOs in all industries need to cut procurement expenditure substantially and quickly, but the conventional approach of focusing on reductions in category spending is too slow and often insufficient to generate competitive advantage. A more effective approach leverages both supplier relationships and technology and is tailored to each of the following major vendor segments:

• A-Suppliers. Our innovative 360° Program for A-Suppliers engages the most senior levels—including the C-suite—to get the right decisions in place. The ambition is bold: to double the savings in a partnership mode.
• B-Suppliers. We push for procurement excellence, an approach that focuses on using the right commercial and technical levers, backed by the right preparation, to cut costs. BCG’s AI Negotiation Coach tool helps make this a reality, suggesting to the buyer the right go-to-market approach and analysis. Over time, the coach—being an algorithm—learns from the outcomes and becomes increasingly strategic and effective.
• C-Suppliers. Our step-up-to-contribute program harnesses potential savings from the smaller vendors (which tend to fly under the radar) by increasing their visibility and making them contributing partners. Our AI Tail Cutter tool generates an appropriate savings target and steers the communication with an individualized approach.

Suppliers must comply with comprehensive legislation and directives involving the environment, society, and economics. But meeting requirements isn’t enough. Leading companies across industries are already pushing beyond mere compliance and working to implement net-zero supply chains.

To deliver value through sustainability, BCG’s procurement consulting team supports companies in:

Change management is critical to ensuring that procurement becomes a source of competitive advantage. It is integral to almost all of our procurement projects. To ensure that results are swift and sustainable, we work side by side with your teams so that they are clear on what digital procurement achieves in savings, sustainability, and competitive advantage. We are here to answer questions, integrate team-specific needs, and overcome pain points.