Procurement & Strategic Sourcing

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ERP Enterprise Asset Management Supply Chain

Our client is a regional water and wastewater utility service provider with a complex supply chain involving materials, outsourced and supporting services with spend ~$0.5bn pa is required to enable the asset management activity. An ERP upgrade was in progress to replace an outdated and unsupported ABB Ellipse system version. The Ellipse ERP upgrade was used as a platform to catalyse a major transformation of Enterprise Asset Management in the organisation including optimised mobile workforce management using Click Field Service Edge (FSE). GRA were engaged to provide Supply Chain subject matter expertise supporting the functional design of the ERP System Integration Project Consortium, specifically in the areas of Contract Management, Service Procurement, Work Order Management and Procurement Framework. For each of the focus areas our team set out to investigate Business Requirements and System Capability. 

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Supply Chain Network Optimisation (Llamasoft)

Our client is a publicly listed company that sources and manufactures bathroom and kitchen products nationally to trade and consumer channels across Australia. They were undertaking significant business transformation, which included changing their business model from being a primarily locally manufactured organisation to an internationally sourced one, and needed help to compare sourcing & distribution network options that could be deployed to improve service level performance whilst reducing working capital and costs. GRA were asked to build a model to assess the viability of a number of sourcing & distribution operating scenarios. The team used Llamasoft Supply Chain Network Optimisation Software and Tools to create a model that demonstrated that a segmented service offering could deliver enhanced overall service performance (from 80% to 95% line fill rate) with further enhancement of priority products (to 99%  line fill rate). The results of the modelling efforts were used to inform executive level business strategy planning which has subsequently resulted in the business halting a declining market share, increasing EBIT, Margin % and TSR compared to benchmark organisations.

 

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Strategic Sourcing & Supply Chain Strategy 2

Our client, a multi-billion-dollar investment holding company had acquired several large Australian retailers with a network of more than 300 stores across the country, and was in the process of defining their future integration plans and capability requirements. With stability of product range, store expansion and e-commerce being key drivers for the business, the company engaged GRA to develop a strategy to deliver cost reduction, improved service levels and greater utilisation of company-owned assets. Key to this engagement was a strong emphasis placed by the client on ensuring supply chain expertise was incorporated into the development of the strategy to ensure a sustainable outcome was delivered. The resulting business case developed by GRA provided opportunities to reduce costs, improve margins and drive greater utilisation of company owned assets. It also delivered a strategy to establish a common infrastructure and enable future acquisitions to be integrated into a common supply chain.

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Strategic Sourcing & Supply Chain Strategy 1

GRA assisted one of Australia’s largest office supplies retailers to develop a global sourcing and supply chain strategy with identified benefits of over $8m. A strategic initiative to improve gross margin by implementing global sourcing resulted in significant cost improvements to the company’s bottom line. The company sought GRA’s expertise to unify their global sourcing and supply chain strategies into an integrated strategy, including identification of optimal locations for supply chain activities within the consolidated logistics network. GRA identified $8m in operational savings through more efficient management of import channels to handle the increase in globally sourced product. This was in addition to the expected margin benefits of sourcing more product from overseas.

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Procurement IT Evaluation and Selection

Our client, Australia’s leading rail freight operator and a top 50 ASX company, had undertaken a large scale transformation journey from a government owned enterprise to an ASX listed company, with considerable success in improving the commerciality of the business. As part of the transformation and in pursuit of further savings opportunities the company initiated a project to transform the efficiency and effectiveness of the procurement function. The procurement transformation project identified a number of improvement opportunities, including the need for a procurement IT solution. GRA provided a detailed analysis of potential business benefits from improving core procurement processes through IT-enablement revealing a compelling business case for implementation of a leading procurement IT solution. 

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Procurement Transformation

Our client is Australia’s leading rail freight operator and a top 50 ASX company. Over the previous five years the company had embarked on a large scale transformation journey from a government owned enterprise to an ASX listed company. As the opportunities for savings through restructuring had largely been captured, the company was looking for further savings opportunities, including looking to Procurement to find ways to significantly reduce external spend. GRA was engaged to design and lead a company-wide Procurement Transformation program. Our approach was to be highly collaborative in order to engage a recently restructured Procurement department and re-establish stakeholder relationships with the business. Initiatives delivered include identified total procurement savings opportunity of $120m with implemented initiatives delivering $75m in the first 12 months.

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Supply Chain Strategy – End-to-end design (network, imports & online)

A multi-billion dollar investment holdings company had acquired several large Australian retailers with a network of more than 300 stores across the country. GRA was engaged to review the discrete supply chains of each brand and design a Group-wide supply chain strategy to minimise costs and enable growth through to 2020. Our client sought assistance to create a business case for the board to optimise the supply chain footprint, network and import methods. They also wanted to commit to a scalable, shared supply chain strategy moving forward. 

GRA developed a strategy providing opportunities to reduce costs, improve service levels to stores and drive greater utilisation of company-owned assets. We also delivered a strategy to establish common infrastructure and enable future acquisitions to be integrated into a common supply chain. GRA identified around $14m in cost reduction in the first 5 years at a net present value of $6m after taking into consideration the required investment. 

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Planning & Warehouse Operations Review

Our client is a vertically integrated food and logistics business. Their core business is as an online, direct-to-home retailer of fresh food and grocery product. The company was embarking on an organisation wide transformation with the objectives to raise customer numbers, average basket size, and optimise costs. As a result they engaged GRA to review the appropriateness of the current supply chain, its warehouse operations, transport, planning, procurement and network from a cost, service and growth perspective. The outcome was a workshopped roadmap of a series of recommended Process and Systems changes in the areas of the warehouse operations and demand, inventory and replenishment planning. This Roadmap factored in the business’s growth strategies and provided a practical approach on the key enablers that would allow the client to deliver to the roadmap. 

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Testimonials

GRA’s consultants are clever, system-savvy, ex-Planning Managers from industry – who have hands-on experience in the planning requirements of FMCG. Their engaging, logical, and disarming approach meant that our planning team were happy to cooperate with GRA in full, and also happy to hear GRA’s list of suggested improvements.

– Danny Mellon, GM Planning, Logistics & Procurement, Simplot

Typical results

  • 20-40% inventory investment reduction
  • increased service levels ranging up to 99.9%
  • 10%-15% reduction in supply chain operating costs
  • 5%-20% spend management savings
  • the ability to fund business initiatives from operating cash flow (OCF) improvements
  • improved return on capital employed (ROCE)
  • a minimum 3:1 ROI (10:1 to 30:1 typical)