CASE STUDY

Savings Identification

This logistics company was undertaking a strategic review to transform the group through a number of initiatives. In the area of third-party expenditure, the client sought to reduce costs and improve efficiency through analysing third party spend and developing strategic procurement approaches. The client is a conglomerate of companies that operate several different accounting systems, this diffusion of information meant that they did not have a clear picture of its total third party spend across the group.

ArcBlue was selected via a competitive process to perform a spend and opportunity analysis on the basis of our capability, quality and experience of consulting personnel, analytical capability and the realistic estimates of savings provided to the client by ArcBlue.

We analysed the spend data, dividing it into non-addressable, addressable and influenceable spend. We then analysed the influenceable spend by category and sub-category and identified cost reduction and efficiency improvement opportunities in each sub-category, as well as other improvement opportunities such as reductions in working capital and internal process efficiencies. We also reviewed and critiqued the client’s existing contracts and identified opportunities for improvement.

ArcBlue identified 32 opportunities across 16 categories with estimated savings of $13.5m.

We delivered a final opportunity identification report detailing:

The size and distribution of the client’s spend across spend categories, business units, suppliers and geographies.
Analyses of current category situations, supply markets and savings opportunities for each of 16 categories.
A ‘wave plan’ prioritising all initiatives by potential benefits and ease of implementation.

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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