Optimize your procurement terms long term

We systematically screen your procurement department for optimization potential and room for savings

As a HÖVELER HOLZMANN client, you want to help your procurement department contribute more lasting value by incurring less cost and achieving more turnover. To accomplish that, we assist you in every aspect of your procurement optimization. Using our agile, tool-based methods,we subject all of the conventional and innovative optimization points and approaches along your company’s entire supply chain to a structured test.

Potential savings, activities, and procurement levers – from best country sourcing, to make or buy analyses, game theory, cost engineering, 360-degree product analysis, and linear performance pricing – are condensed into commodity group strategiesInterdisciplinary workshops also ensure practical implementation.

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We implement your procurement optimization project in three steps

Step One: Potential Analysis – Quantify Potential Savings and Quick Wins Systematically and Swiftly

Our Expertise:

During our potential analysis, we examine everything you procure as well as your supply chain, quickly quantify potential savings, and customize implementation pathways for you.

A potential analysis is usually how we begin our collaboration with you to optimize your procurement terms. You'll promptly receive an appraisal of potential savings. We will also draw up a specific, detailed plan of action which will enable you to realistically achieve those savings.

The Benefits:

The potential analysis gives you the peace of mind that you’re approaching the optimization of your procurement properly. You’ll come to know which savings – including quick wins – can be achieved in the foreseeable future through procurement optimization. As well as telling you what the potential savings are, we’ll provide you with detailed implementation plans that describe the ideal optimization sequence as well as implementation pathways appropriate to each commodity group.

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Step Two: Implementation – Achieving the Potential Savings Identified

Our Expertise:

In this phase of optimizing your procurement terms, we help you to achieve the potential savings identified in the potential analysis. We’ll help you realize those potential savings in different ways, depending on the amount and the characteristics of your procurement market. These methods include the strategic procurement process (strategic sourcing/global and best country sourcing), conducting negotiations – including advanced negotiations (such as game theory, application of the Harvard concept, negotiation scenarios, and supplier seminars) – demand management (optimizing demand management by means of approaches such as zero-based budgeting and spend control towers), or undertaking joint cost optimization together with suppliers in interdisciplinary teams.

  • Optimizing terms for direct/indirect commodity groups, services and capital goods (CapEX)
     
  • Building up alternative supply sources to ensure supply security, quality of supply and services, and innovative strength


The Benefits:

  • Greater profits: Achieve greater savings through the consistent application of a strategic procurement process
     
  • Double confidence:
    • Enjoy the peace of mind of paying prices in line with the market, having exhausted all of the potential saving points and therefore achieved maximum savings
    • Reduce supply risks by developing alternative supply sources
Step Three: Securing Success – Safeguard the Savings Achieved Long Term

Our Expertise:

This safeguarding of success begins after implementation and ensures that the savings and results achieved by our clients are implemented long term, and that new methods and approaches become permanently established in their procurement practices.

All too often, we’ve seen that the results of a successful project designed to optimize procurement terms don’t last in the medium or long term. This can be for a number of reasons: A supplier chosen as part of the optimization of procurement terms might unexpectedly turn out to be unsuitable, or new instructions issued from the procurement department in a company may not be followed closely enoughby staff.

That’s why we stick with you when it comes to securing the successes achieved in the optimization of procurement terms.

The Benefits:

  • Greater profits: If necessary, we can work with you to revise the planned measures if unforeseen complications arise, or if ways of improving things even more are identified
     
  • Confidence: We ensure that the terms agreed on with suppliers are complied with, and you aren’t subjected to hidden costs. We also sit down with your finance and controlling department to make sure all of the savings achieved are reported in your income statement.
     
  • Reputation: By ensuring that all of your initiatives remain sustainable, you will come across as professional and become a dependable partner inside and outside your company.

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Graphic Consulting Sustainable Supply Chain Procurement Optimization

Our Expertise in the Procurement Optimization of Commodity Groups

We have comprehensive knowledge and proven best practices in optimizing direct and indirect commodity groups across different industries. More than 200 clients rely on our expertise.


Our expertise in procurement optimization focuses on the following four areas:

Procuring Raw Materials

Sourcing raw materials can be a major challenge for procurement departments. The reasons for this are highly volatile markets, listed goods whose prices are almost impossible to influence, and supply bottlenecks. In-depth knowledge and comprehensive expertise, including in relation to upstream steps and processes in the value chain, are the key to success in procuring raw materials.

Here are some of the raw materials and related supplies that we’ve optimized successfully for our clients:

  • Agricultural commodities (e.g. nuts, strawberries, corn, wheat)
  • Chemical raw materials (e.g. alkyl-D-glucopyranose, ammonia, sodium laureth sulfate, phosphoric acid)
  • Industrial metals (e.g. aluminum, iron, steel)
  • Plastics (e.g. polycarbonate, PVC, SAN)
Saving on Packaging

Packaging has long been recognized as a sales driver on the distribution side. But on the procurement side, potential savings are often not fully realized. Yet packaging is usually a major factor in a company’s overall procurement volume. This means that savings achieved in these commodity groups have a significant influence on overall procurement success.

Here are some packaging commodity groups which we’ve successfully optimized for our clients:

  • Wrapping
  • Cardboard boxes
  • Labels
  • Preforms
  • Lids/closures
  • Blisters
  • Plastic bottles/canisters
  • Glass
  • Food cans
Optimizing Indirect Materials

Procurement volumes relating to indirect materials are often highly fragmented. What may seem like an insignificant factor can make up a considerable share of overall procurement when considered collectively. That’s why optimizing this element of sourcing can have a significant impact on a company’s profits.

Here are some commodity groups which we’ve successfully optimized for our clients:

  • Workwear
  • Office supplies
  • Vehicle fleets
  • MRO (maintenance, repair, and operations) goods
  • IT hardware
  • Advertising materials
  • Tools
Procuring Services

Many buyers really dislike procuring services. Business units can place heavy demands and specifications can be imprecisely defined, making it difficult to compare different service providers. But if you use intelligent methods, even supposedly complex buying groups can be optimized.

Here are some commodity groups which we’ve successfully optimized for our clients:

  • Consulting and testing
  • Business travel
  • Marketing services (e.g. creative, event, and media agencies)
  • Cleaning services
  • Security services
  • Shopfitting
  • Telecommunications
  • Transport services (e.g. road, sea, air)
  • Temporary staff

HÖVELER HOLZMANN CONSULTING GmbH

Bahnstraße 16
40212 Düsseldorf
Germany
Phone: +49 (0) 211 - 56 38 75 - 0
Fax: +49 (0) 211 - 56 38 75 - 69
Email: info@hoeveler-holzmann.com