Restructuring the procurement areas of one of the largest Brazilian conglomerates

Our client

Highly diversified with consolidated annual net revenues exceeding USD 10 billion, acting as an important player in the business fields of Cement, Concessions, Engineering and Construction, Rail and Energy, Apparel and Footwear, Real Estate Development and Ship Building, and employing almost 60,000 professionals in more than 20 countries, our client is among the largest business groups in Brazil.

Background:

• Our client was searching for the ideal level of centralization of its procurement processes and organization in the area of heavy construction, a classic trade-off:
• Local purchasing independence provides agility to business units, whereas centralization bring significant synergies and cost reduction opportunities.
  The solution should rapidly define a new procurement setup without risking the supply of raw materials, machinery & equipment and services.

Approach:

• As a first step, we conducted a spend analysis based on past procurement transactions in order to derive typical future demand trends.
• Secondly, we developed a procurement process landscape based on specific service levels for different materials.
• Finally, we defined a central procurement organization and local purchasing teams to support the new process landscape.

Outcome:

• A customized procurement setup including processes and methods, organizational structure and proper behavior guidelines.
• A supplier management tool based on logistics, commercial and technical performance assessment.
• A cost saving plan based on expected synergies aligned with overall business strategy.