Case Study

Reducing operating costs through procurement transformation and strategic sourcing


A surgical and orthopaedic products manufacturer with presence in nearly 100 countries

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Business need addressed:

To reduce operating costs and improve supplier management processes Procurement transformation across 15 indirect categories 

Business impact:

$80 million in savings in 12 months, introduction of best practice supplier management and procurement policies, and supplier consolidation

The procurement function at a global surgical products company was challenged by the need to cut operating costs, and introduce structured governance and supplier management. Genpact professionals led a transformation program across 15 indirect procurement categories with a cost base of $800 million. As a result, the manufacturer achieved $80 million in savings within 12 months.

Business challenge

The procurement function faced challenges from:

  • A business imperative to reduce operating costs
  • Too many suppliers across each indirect category providing similar services
  • A need to increase internal control and improve governance
  • A lack of cost transparency
  • Too many buying channels
  • Failing to leverage global scale to achieve cost savings

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Genpact solution

Genpact professionals led transformation activities across 15 indirect categories with a cost base of $800 million:

  • Identified cost saving initiatives
  • Managed strategic sourcing activities
  • Refined procurement policies
  • Introduced structured governance and supplier management processes
  • Optimized demand management
  • Leveraged technology to streamline buying channels and improve data quality

Genpact supported the following 15 categories

  • Bank fees
  • Consulting
  • Credit cards
  • Digital marketing
  • Facilities
  • Freight and logistics
  • IT
  • Janitorial
  • Legal
  • Meetings and events
  • Maintenance, repair and operations
  • Permanent recruitment
  • Specialist cleaning
  • Temporary labor
  • Travel

Business impact

The procurement transformation and strategic sourcing activities delivered:

  • $80 million in savings within 12 months
  • A roadmap to generate additional savings over the next 24 months
  • Best practice procurement policies, and governance processes supported by facts and data
  • Significant supplier consolidation, and an improvement in service levels and performance

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