Better practice procurement through category management

Better practice procurement through category management
The Client: Major utility provider

The situation

A utility provider was undergoing a significant transformation to become recognised as a leading utility. The procurement function had been identified as a priority candidate for review and transformation. The utility sought external expertise to conduct the review and identify a pathway for improvement.

The challenge

The delivery of procurement within the utility was a shared responsibility amongst differing business units, resulting in blurred lines of responsibility and accountability for outcomes.

Additionally, a concurrent project was underway to improve facilities for the storage of the utilities’ inventory. As the review of the procurement function involved detailed spend, inventory and asset analysis, our client quickly required a clear outline of the future purchasing and inventory model in order to inform the size, location and functional requirements of future storage facilities.

Grosvenor was therefore required to collaborate with multiple business units, undertake detailed spend and inventory analysis and produce recommendations for the future model within extremely short timeframes.

The project

Grosvenor pulled together a project team with specific expertise in procurement, category management and spend and inventory analysis, and commenced stakeholder consultations. We collected data on historical spend, and undertook detailed spend and inventory analysis. We also benchmarked the current state of procurement, including the current service delivery model, with better practices and like organisations.

The results

Grosvenor produced a detailed report on current inventory and spending across the utility. We identified opportunities for improvement, including through the implementation of a refined service delivery model, broader market testing for goods and services, and implementation of category management. We conservatively estimated the potential for future savings of 11% per annum.

We also provided the client with a practical implementation plan and guidance to support the rolling out of the changes across the utility.