Strategic Sourcing and Multi Tiered Inventory Processes

A strategic sourcing review was completed, enabling a reduction in purchasing staff, improvement in operations and a cost saving of 14 to 22% across key categories

The Background

100+ suppliers being called upon by 16 different supply groups based on very localised personal motivators

Above the market pricing being paid with unreliable and poor logistics; coordination with managed supply, typically direct to sites across QLD, TAS and WA

Little managed purchasing leverage and indifferent accounts payable process

Non-labour spend averaged about $400mpa

How the Siecap team helped

Tendered to very wide market for innovative approaches to reduce purchase prices and supply system costs. Settled on 14 suppliers for non-OEM non-critical production spares

Established all supply agreements with various forms of purchasing automation

Introduced life cycle cost considerations and fixed hourly costs as key determinants in tenders for primary production equipment procurement

The Results

Purchasing staff reduced from 16 to 6, increasing productivity from 500 order lines per month to more than 4500 per month. Warehouse throughput increased from $500k per week to $2.5M per day

Purchase savings ranged from 14% to 22% depending on the category. Process savings reflected in reduction of inventory from $13.5M to $8.5m, overall staff reduced from 42 to 29 and two largest sites achieved OTSDP (fill rate) at the site of 99%

Our Clients

We have delivered results for distinguished businesses and projects in Australia and abroad.