Large wireless telecommunications company launches sourcing campaign and identifies over $16MM in savings

Situation:

Following two acquisitions and recent re-branding, the company needed an integrated approach to leverage their spend volume and develop standardized sourcing processes. With a wide array of potential categories that would yield savings, including Office Supplies, Travel, Temporary Labor, Small Parcel, and Office Furniture, the company selected ICG Commerce for their category expertise and proven sourcing capabilities.

Solution:

After conducting an in-depth assessment of spend and market conditions for nine different categories, ICG Commerce identified six categories that would yield the greatest savings. A 26-week sourcing plan was developed, and the first category selected was Office Supplies. Having grown through many acquisitions, indirect categories had a large and diverse stakeholder group, poor compliance, and strong biases to the 'legacy' company's incumbent suppliers. ICG Commerce leveraged its knowledge of supplier capabilities and pricing benchmarks to accelerate sourcing and negotiations with suppliers to complete sourcing within 8 weeks. Implementation was completed less than 30 days later.

Working from the success in the first category, the team began sourcing the largest category opportunity, over $37MM in Small Parcel spend. However, prior to launching the sourcing program with ICG Commerce, the company had already begun an RFI process on a portion of the spend. Using deep transportation and freight category expertise, ICG Commerce reviewed and revised the RFI and followed a rigorous strategic sourcing process that was completed within 10 weeks. Savings were captured by negotiating locked rates and rationalizing and improving service levels.

Results:

For the complete sourcing program, identified savings exceeded $16MM. Individual category savings included 4.5% on Transient Air, 12% on Temporary Labor, 27% on Small Parcel, and 30% on Office Supplies.