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High-Definition Sourcing: When Traditional Sourcing Just Isn’t Enough

4/18/2011

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Strategic Category Sourcing Today

»Which categories are strategic? » Those your business can’t succeed without » Those you can’t afford to overpay for» Those that require information found outside procurement’s

domain» Those that may include non-price driven factors, e.g.

sustainability or diversity» High risk potential

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The Impact of Sourcing Complexity

» Category leaders frustrated by the size of the task, messiness and past failure»Category leaders stymied by stakeholders or market

intractability »Traditional sourcing cannot deliver the ROI on the

effort

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Technology+Expertise+Process »High-Definition Sourcing Technology

» Enables more sophisticated proposal collection and analysis, including the ability to use “what-if” scenarios

» Builds supplier performance management and triggers for re-evaluating supplier selection

»High-Definition Sourcing Expertise » Tap domain and process experts to bring market and industry

best practices to bear on your own sourcing process

»High-Definition Sourcing Processes» Holistic, encompassing source-to-spend » Standardized, with room for deviation » Automated, using technology to optimize efficiency

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Client / Project Historical Spend

Savings Expectation

Savings Achieved with BCS

Key Points

Consumer Packaged Goods/ Folding Cartons $220 MM Unknown / pilot

approach 20%

» Initial $10 M pilot saved 12%, full follow-on event with additional $210 million saved ~20%

» Additional 17% savings available with corrections to upstream decision-making, which prompted considerable attention

Pharma & Health Products / Rigid Plastic Containers

$52 MM <8% 18%» In addition to $9 MM in savings also achieved free mold maintenance,

free freight, and free transfer of molds » Considered alternate materials, processes, machines, and plants

Transportation Company /Logistics $180 MM 5% 22%

» Advanced sourcing mentality» 3rd time through category

Industrial Supply – Less-than-Truckload $80 MM 6% 44%

» Analyzed over 1GB of data» Final award decision through consensus with 17 buyers

Manufacturer / Ocean Freight $30 MM 10% 25%

» More than 40 BU; over 1MM lanes; 98 carriers» Over 250 scenarios run

Healthcare Conglomerate /MRO $30 MM 4% 17%

» Sourced 6 sub-categories together» Covered 5 business units serviced by 65 suppliers» Sign contracts < 3 months from RFP launch

Pharma & Health Products /Facilities $25 MM 6% 18%

» Sourced 8 subcategories across 26 North American locations and 130 mostly local incumbents

» Included spec collection, RFP, & optimization

Real ROI with High-Definition Sourcing

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High Definition Sourcing: The Last Word

»For even the most complex categories, high-definition sourcing delivers »Sustainable, real-world savings»Superior supplier / buyer collaboration»Robust investigation into category economics»Deeper understanding of suppliers’ strengths & weaknesses»Broad supply chain considerations»New insights to drive better business results»New/emerging sourcing opportunities identified»Detailed analysis of the cost/benefit of business constraints»Competitive advantage in all market conditions» Long-term value from sourcing / spend analysis initiatives

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Contact Us

»217 N Jefferson, Suite 400Chicago, IL 60661Phone: +1 312-201-9600Fax: +1 312-201-9700

»For more information on BravoSolution’s high-definition sourcing and spend analysis solutions, visit BravoSolution.com.