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International Procurement Office Design, Development & Implementation

In an increasingly global economy, companies are seeking to develop a more rigorous and comprehensive global sourcing capability.  Low Cost Country sourcing is increasingly becoming a key element of many company’s overall supply management strategies, driven by
  • Structural cost advantages in certain category supply markets
  • Increasingly sophisticated, capable, and flexible supply base
  • Aggressive governmental incentives and commitment to further development
A.T. Kearney Procurement & Analytic Solutions has successfully helped numerous companies to realize the tremendous upside associated with LCC sourcing, while managing the increased complexity compared to traditional sourcing in established markets poses.  To mitigate risks and ensure successful supply transfer, careful implementation planning and key stakeholder involvement can be achieved utilizing our International Procurement Office design, development, and implementation services.

International Procurement Office design, development, and implementation helps clients:
  • Accelerate the scale and timing of margin/cost improvement benefits from sourcing in China, India or other opportunity market
  • Establish an in-region skilled and effective sourcing team including access to necessary technical resources to support supplier qualification, on-boarding, quality management, design/engineering change management and other necessary gating functions (pre-transactional activities)
  • Create reliable supplier relationships and networks able to sustain expected performance and economics
  • Develop sustainable global coordinating processes to support effective teaming and results across the organization
Challenges are addressed by our approach include:
  • Establishing “Home country” support and sponsorship of business owners, stakeholders and critical technical support resources for the low cost country sourcing commodity candidates
  • Aligning required resource development investment timing (doing it right) with net benefit flows (getting the benefits)
  • Creating and adopting common and sustainable global sourcing processes across the organization
  • Recruiting, developing and sustaining quality resources geographically isolated from the established professional sponsoring communities
  • Mitigating turnover and successfully competing for quality bilingual professional in-country staff
  • More Capabilities and Benefits Realized Faster: Accelerated LCCS Benefit Streams (Margin/Cost Improvements)
  • Multiple Concurrent Activities: Organization Building, Operating Processes/Practices Establishment and Sourcing Activities Advancing In Parallel
  • Attractive Economics: Accelerated Benefits, Leveraged Resources/Infrastructure, Attractive Support Rates (Consulting, Staff Aug, Technology) With Performance Based Component and Possible Sustaining Share Services/Facilities
  • Risk Mitigation: Intellectual property, government regulation, local knowledge/culture, and international logistics
  • A.T. Kearney was one of the first among the global management consulting firms to establish itself in China and we have worked with many leading companies to establish their LCC sourcing strategies and gain significant impact to their bottom line
  • We have conducted business in China for over two decades and which has established us as the premier consulting firm in the region.
  • We offer clients the ability to leverage existing A.T. Kearney staff & IPO infrastructure to begin to realize savings in parallel with supporting the development of their own IPO in a build, operate, and transfer approach (BOT)
  • The BOT approach leverages A.T. Kearney resources to fill staffing gaps, address peak demands, mitigate turnover, co-mingle staff for enhanced training and leverage established A.T. Kearney bilingual recruiting, training and tools capabilities
  • We have developed broad experience and capability in low cost countries through engagements with local and multinational clients.
  • A.T. Kearney's Global Services Location Index™ (GSLI) offers a snapshot for both business leaders who must choose among a growing number of offshore locations, as well as the policy makers who seek to influence their decisions.
  • Established in 2004, the GSLI analyzes and ranks the top 50 countries worldwide as the best destinations for providing outsourcing activities, including IT services and support, contact centers and back-office support. Each country’s score is composed of a weighted combination of relative scores on 43 measurements, which are grouped into three categories: financial attractiveness, people skills and availability, and business environment.
A major health care products distributor wanted to establish an International Procurement Operation to Support Low Cost Alternative Sourcing

The objective was to drive significant (over $300M) annual spend to LCC markets

Several of the key success requirements required outside support
(Deep expertise in other types of sourcing, facility and staff expansion, process and technology improvements)

A.T. Kearney helped in two ways:
  • Provided traditional consulting support in the areas of (IPO   design and set-up, Sourcing Wave execution)
  • Partnered with client in a Build-Operate-Transfer (BOT)   mode
The project resulted in significant benefits:
  • Accelerated sourcing & IPO processes implementation with immediate staffing coupled with transitioning to captive resources as hiring/onboarding ramped up
  • Leveraged shared services for recruiting, training and technologies
  • Mitigated performance risks and sourcing project delays by avoiding employee turnover
  • Leveraged co-location and proximity offices with “Plug N Play” staff with high customer Interaction (In-Region and Domestically)

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  international procurement office design, development & implementation
 
 
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