New sourcing plan lowers costs

DialCo had taken steps to improve procurement processes by consolidating warehouses and reducing inventory, but more work was necessary. Bain helped the client establish and quickly implement a strategic sourcing plan to increase buying power and lower costs. The result: more than $150 million in identified cost savings.

DialCo wanted to cut costs by dramatically upgrading its procurement processes.

The senior management of DialCo was under pressure from Wall Street to reduce operations costs by as much as 10%.

DialCo had already taken steps to improve procurement processes and capabilities through existing initiatives such as

Reorganizing around commodity teams
Consolidating warehouses
Reducing excess inventory

Management felt more work was needed, and asked Bain to help achieve two objectives:

Realize significant cost savings in the short term
Build world-class sourcing capabilities, integrating the procurement group and other business units

View Approach

To realize opportunities across the company's spend base, Bain worked with DialCo to establish an initiative management process and governance structure.