Realizing Procurement Cost Savings in Tail Spend
Challenge
A global life science company was facing increasing pressure to reduce its costs of managing tail spend. In addition to high procurement costs, the time required for ordering and tracking these often specialized yet infrequently purchased products was draining overall efficiency and productivity. Managing multiple purchase orders from various suppliers was compounded by a reliance on smaller organizations with less-efficient ordering and distribution platforms.
How could the company improve the procurement process without interrupting the workflow of its researchers who rely on the timely supply of a large array of specific customized products for discovery?
Solution
The company’s main challenge was dealing with a large and fragmented vendor base. Avantor Services stepped in by harnessing well-established supplier relationships through its MarketSource Procurement solution.
Avantor Services deployed a global project manager to identify overall needs and deliverables, while regional project managers worked with local customer teams to seamlessly integrate the new procurement process.
The Avantor Services team standardized the company’s procurement process across all customer sites, globally. Items and vendors were preloaded into the VWR website and remained for future reordering. No longer did the company have to order through multiple suppliers and deal with varying interfaces and systems.
All purchasing - catalog and non-catalog orders - could now take place through the single, integrated platform of vwr.com.
In addition to serving as the single point-of-contact for the company’s worldwide procurement needs, Avantor Services guaranteed product and regulatory compliance of all purchase orders.
Result
By consolidating the vendor base from which the company purchased materials, Avantor Services’ MarketSource Procurement solution was able to simplify and speed up the ordering process. Though the company averaged over 480 requests a month, Avantor Services was able to:
- Decrease average turnaround time of purchase requisitions by 48%, from 33 hours to 16
- Save $180,000 (USD) in vendor and article creation during the first year of implementation
- Drop requisition turn-around time to less than 16 hours for 75% of orders
- Reduce the vendor base from over 3000 to 1
- Provide a single, integrated order platform to replace numerous others
- Introduce clear SLAs
