Case Study

Procurement transformation generates US$6 million business impact

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Global manufacturer of health and hygiene products

Consumer packaged goods

Business need addressed:
To transform the Source to Pay function for higher performance, standardization, and compliance with indirect procurement policies while driving savings from increased efficiency

Genpact solution:
This procurement outsourcing engagement used a central hub of procurement excellence in Genpact Romania to lower the cost of operations, drive automation and standardization, enhance compliance and controllership, and maximize savings

Business impact:

  • Standardization and simplification
  • Risk and compliance
  • Cost and margin pressures
  • Cash flow and liquidity

A global manufacturer of health and hygiene products partnered with Genpact to transform its procurement function across 11 European countries. Beginning with standardizing and consolidating transactional processes across all locations, the engagement widened to encompass Source to Pay (S2P) support for indirect procurement categories. The company realized $6 million in overall business impact from implementing a robust tactical buying process that delivered $3.5 million in savings from low value sourcing and $2.5 million in working capital improvement.

Business challenge

Procurement organizations’ bandwidth and capacity constraint led them to focus on strategic sourcing, leading to non-prioritization of low-value sourcing. Additionally, their procurement processes and policies were not standard across locations, which led to low visibility and significant non-compliance.

A partnership approach drove transformational change in procurement strategies and processes

Center of excellence

  • Created a near-shore delivery model in Romania that currently serves 11 European countries in seven languages
  • Transitioned processes to effectively manage purchasing transactions through a single procurement platform
  • Ensured real-time data visibility and control

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Procurement transformation

  • Developed saving strategies based on thorough commodity intelligence
  • Reinforced purchasing policies, guidelines, and workflows
  • Proactively approached suppliers to negotiate better payment terms, discounts, and additional benefits from existing contracts
  • Conducted several Six Sigma projects and deployed Lean methodologies to increase efficiencies and standardize processes
  • Instituted a cyclic reporting process that increased awareness of value delivered and identified areas for improvement and opportunity
  • Implemented eInvoicing and increased penetration from 11.4% to 34.5% in three years
  • Increased automation in the purchase order creation process from 30% to 90%

Collaboration and trust

  • Deployed strategic roadmap in category management across seven distinct categories, including MRO, Marketing, and Professional Services
  • Expanded scope to manage low-value sourcing spend up to $150K threshold

Business impact

By deploying best-in-class procurement processes, the client reaped significant business impact:

  • $3.5 million savings on average managed spend
  • $2.5 million working capital benefit
  • 35% reduction in non-compliant spend

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