Challenge
A leading global chemical company based in the UK, with a presence in more than 40 countries and revenue of nearly €7 billion, wanted to gain better control over the sourcing of tail materials at the global level. The client had 10,000+ SKUs, constituting approximately €800 million in tail spend. Tail spend was managed in a fragmented way, and off-contract spending was very high. Additionally, the business processes were non-standard, and process compliance was low. The lack of data linkages between systems and products, along with the absence of a vendor hierarchy, created significant challenges and increased the client’s tail spend.
Solution
STATXO developed customized, interactive dashboards that provided actionable insights on the procurement of tail materials. Data from ERP systems and card transactions was integrated and standardized, with missing information cleansed and supplier-level data organized for analysis. A three-phase approach was used to manage tail spend: first, thoroughly assessing and classifying the problem; second, preparing tailored strategies; and third, implementing solutions while tracking performance improvements. 1,000+ SKUs were grouped into bundles, mapped into a 2×2 matrix for strategic and tactical segmentation, and categorized into typologies to design customized strategies for suppliers
Testimonial
“Impressed by the professionalism and efficiency demonstrated by the STATXO team throughout the project. Their strategic recommendations significantly \enhanced our procurement processes. The structured approach helped us to achieve savings.”- Director, Supply Chain
Overview
Explore how STATXO helped a leading global Chemical company optimize its tail spend by gaining control of the sourcing of tail materials.
Impact
The solution delivered transformative results, enabling the client to save €60 million in the first year. Key impacts included 8-10% savings from renegotiations and reverse auctions, and an 8-12% reduction in price differences between contracted and non-contracted suppliers, significantly optimizing tail spend management.
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