A Fortune 100 Warehouse Retailer
The Warehouse Retailer’s procurement process was done via spreadsheets, phone, and email. This inefficient process caused a high amount of re-work, a lack of visibility, difficulty in training new employees, and missed compliance steps. All of these issues were costing the retailer a great deal of money and missed opportunities.
Salient Process led the implementation of a global procurement process leveraging IBM Business Process Manager (BPM).
The items you see in this giant retailer’s warehouse are sources from all over the world. The Buyers have a great deal of flexibility and responsibility to choose items that are appealing to the market. However, their process for purchasing these items had become unwieldy. It reached a point where the Buyers were spending more time administering and manually completing the process than focusing on finding great items.
Until this retailer worked with Salient to improve their procurement process, it was done by a mix of email, spreadsheets, phone calls, and a legacy mainframe system. It literally took a stack of papers inches high to get an item for their warehouse approved and ordered from a supplier. This created some painful compliance problems. It also created a situation in which the Buyers, who are core differentiators when they can primarily focus on buying. were spending too much time on paperwork, compliance, and email – and not enough time on strategizing purchases.
As a global company, each country has its own buyers. Previously, each country’s set of buyers had their own process and might be completely unaware that they were buying the same items as their counterpart in another country. In fact, they were sometimes bidding against their own company because two buyers from separate countries had no idea the competition was themselves. In effect, they had met the enemy, and it was their own co-workers.
At Salient, our purpose is to enable organizations for higher level thinking. Whenever it makes a process more effective, we always aim to automate and optimize so mundane tasks can be avoided and higher level thinking activities are focused on. By standardizing on one business process and leveraging IBM BPM as the overarching controller, the Buyers were able to remove mundane and repetitive tasks from their daily work, and focus on what they do best – buy great stuff.
The results speak for themselves. The client expanded the number of items being purchased globally by 2000%, increased their buying power to the tune of $54M* in savings per year, reduced the number of global buying processes from over 200 down to 1, and decreased the average number of contacts a supplier needed to interact with by 92%.
The IBM BPM solution Salient delivered introduced much greater transparency and visibility for the client’s procurement process.
One benefit of this increase in visibility is the client’s disparate global buying teams are now able to act as one unit and leverage more purchasing power. An example of this is an item they purchase regularly. They were able to decrease the cost of this item by one penny per unit because of the consolidated purchasing power they now have. Their increased buying power on just this one item saves them $416K per year. This type of global buying power across all the items they buy extrapolates to saving $54M* per year.
The business process management solution Salient and the client implemented has caused a large reduction in the number of individual contacts a supplier has to work with to enable an item to be purchased by the client. In some cases, this had been as many as 51 different individual contacts due to the process being spreadsheets, phone, paper, and email-based. Now there are a total of 5 different contacts any supplier needs to interact with, and the IBM BPM process seamlessly directs the Supplier to the right person, with the right data, at the right time. The Supplier doesn’t have to worry about who they need to interact with at each step of the process.
The benefits for this retailer do not stop with the powerful and ROI generating changes made to their process. Salient has enabled their team to carry the IBM BPM torch, so we are no longer needed there. Salient helped them standup a full IBM BPM Center of Excellence through strategic guidance, boot camps for their employees, and overall mentoring.
At Salient, we like to say our job is to get fired for the best possible reason, which is the client is now mature enough in our methodologies to move forward without us. Our job here is done.
*$54M is an extrapolation and expected savings. Results will vary depending on the overall market and the number of worldwide buyers who choose to participate in buying an item.
Contact Us
