CASE STUDY

GNFR Categories Savings Programme

Our client is a large Australian retail chain with more than 260 stores throughout Australia and New Zealand and a fast growing ecommerce proposition.

Following a period of solid growth through acquisitions and organic means, they made a major European acquisition. After mounting losses, the client sold the European entity at a significant loss. Consequently, the client was proactively seeking support to quickly identify cost savings opportunities across their goods not for resale (GNFR) portfolio.

ArcBlue was engaged to perform a savings diagnostic across the goods not for resale (GNFR) portfolio and to complete an organisation wide assessment of procurement capability utilising ArcBlue’s Dimensions of Procurement Excellence model.

Our approach included spend analytics, stakeholder and supplier interviews, and benchmarking to best practice.

ArcBlue was requested to deliver ‘size of prize’ savings opportunity assessment across ~$700M of ‘Indirect’ Spend which included Supply Chain, Facilities, Marketing, Energy & Utilities, IT & Telecoms and Corporate Services.

As a result of the diagnostic, multiple opportunities were identified, and recommendations made including:

We identified conservative savings range of $34M (4.8%) with full potential savings of $60M across the influenceable categories.
A change to procurements resourcing and organisational structure was also designed and recommended.
The recommendations to pursue the savings and the additional resourcing were endorsed by the management board.
We also recommended the instituting of a Procurement spend cube with spend analytics and reporting. This recommendation was also accepted and funded, and our client has been utilising ArcBlue’s spend analytics solution ever since.

Need help to identify and deliver savings?

ArcBlue’s Savings & Opportunities programs follow a structured methodology beginning with cleansing and categorising spend data and finishing with benefits realisation and reporting. We provide embedded teams to work with the client to fully understand and cleanse data and to create opportunity dashboards to visualise and prioritise opportunities. We then work with key stakeholder groups to validate the opportunity before creating a ‘wave plan’ to drive savings through the organisation.

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