ICG Commerce provides sizable procurement savings and solutions for clothing company

Situation:

With growing cost-cutting pressure from the CFO, the procurement group of a major $4B apparel manufacturer was under the gun to achieve savings as rapidly as possible. Having already spent $1M in consulting costs without significant results, the group was looking for a working solution to produce 5-10% cost reduction, improve procurement and purchasing processes, and deliver initial savings in 3-6 months.

Solution:

Combining extensive expertise and leading technology, ICG professionals developed a sourcing strategy that effectively addressed 8 categories of spend in 3 months. Savings opportunities were identified using various methods and tools, including category spend assessments, eRFIs, eRFQs and traditional sourcing techniques. Savings were achieved through online reverse auctions - conducted both by ICG Commerce experts and ICG Commerce-trained company personnel - as well as e-catalog purchasing leveraging pre-sourced supplier agreements and optimal pricing negotiated with ICG Commerce's aggregated buying power.

At the same time, ICG Commerce conducted a comprehensive change management program to promote adoption of the new procurement processes, plus implemented proprietary savings and compliance tracking technology to drive continuous improvement.

Results:

The apparel company's procurement group achieved its goal of generating initial savings within 3 months, and surpassed its overall cost reduction objective with median savings of 16.5%. The company has effectively established world-class procurement processes and increased purchasing efficiency with 95% new supplier adoption.