Supply chain and global economy dynamics are providing massive opportunities in procurement and sourcing

Companies are adjusting to the new global economy and the changing supply chains due to many factors including the COVID-19 virus. These organization are becoming severely strained and procurement professionals are scrambling to adjust to their changing supply and demand models, as well as dealing with immediate issues regarding inventories, delivery, changing sources of supply, and pricing dynamics not seen in decades.

Argo’s Procurement & Sourcing practice delivers customized solutions through our dedicated sourcing resources, our industry-experienced operators, and our established group of subject matter experts. Over the past 20 years we have developed a procurement and sourcing practice which continues to deliver results driven by:

Deep Sourcing Expertise

  • Process and category experts
  • Senior procurement leaders
  • Direct category experts covering leading commodities, raw materials and other customized solutions
  • Indirect category experts supporting supply chain, GS&A and professional service expenditures
  • Network of internal and external subject matter experts
  • Make vs buy and Insource vs outsource
  • Low cost country

Private Equity Experience

  • Work with middle market portfolio companies in almost every vertical
  • Create the “modern-day” contracting language that suppliers use in cross-portfolio situations, allowing for portability of the agreements in the case of divestiture
  • Can play an interim implementation role to ensure savings are “captured”
  • M&A integration, synergy assessment & capture
  • Provide training, skill development, and knowledge transfer to current procurement team
  • Assessment of current organizational maturity levels and development of plans to close gaps

Ability to Identify and Capture Savings

  • Millions of dollars in realized savings over hundreds of projects and dozens of commodities sourced for mid-market, private and public companies
  • Every dollar saved is an equal improvement in EBITDA, which results in a valuation increases that are a multiple of the dollars saved
  • Sustainable improvements that allows the organization to continue to realize benefits long after projects have ended

Argo’s typical procurement & sourcing program encompasses three phases: 1) Assessment & Spend Diagnostic phase, 2) Implementation & Category Sourcing phase, and 3) Monitoring & Sustainment phase. 

1) The Assessment & Spend Diagnostic purpose is to define magnitude of spend within a single portfolio company and/or across the enterprise and determine savings, improvement opportunities, and timeline. Typical assessment and spend diagnostics include:

  1. Strategic Sourcing capability
  2. Contract review and maturity assessment
  3. Vendor managed inventory
  4. Spend Diagnostics to include commodity spend and risk assessment
  5. Make vs Buy process maturity
  6. Supplier qualification process assessment
  7. Metrics and performance management review
  8. Enterprise & organizational assessment and ability to leverage spend
  9. Cost reduction targets and language
  10. EBITDA impact and implementation timeline
  11. Procurement performance assessment

2) The Implementation & Category Sourcing phase is focused on improving targeted spend categories and process / organizational gaps identified during assessment phase. Ultimately this phase drives sustained improvement and delivers bottom line results. Industry specific solutions are implemented using 20 years of sourcing and procurement expertise. Typical workstreams include:

  1. Interim Management
  2. Strategic sourcing process
  3. Supplier rationalization
  4. Direct and indirect spend reduction
  5. 3rd Party & outsourcing consolidation and effectiveness
  6. Negotiating and contract support
  7. Supplier qualification
  8. Category management and strategy development
  9. Organizational redesign to support sourcing strategy Tactical/Strategic
  10. Supplier Cost reduction targets and contract language
  11. M&A integration and support
  12. Supplier relationship management
  13. Supplier segmentation

3) Finally, the Monitoring and Sustainment phase is designed to ensure implementation roadmap is on plan, organization and processes are established to ensure sustainability and deliver results identified utilizing:

  1. Global organization with multinational sourcing experience
  2. Working hand in hand with organization driving improvement
  3. Subject matter experts who “have been there and done that”
  4. Deep industry experience to bring best practices to bear
  5. Dedicated relationship management to ensure a cohesive team approach
  6. Supplier performance improvement metrics and reviews

Over the years Argo has developed a comprehensive approach that combines strategy, governance and execution to not only drive benefits, but also sustain and improve them over time. A key attribute of our approach is balancing direct savings initiatives with building world-class, sustainable procurement capabilities and processes within a company’s procurement organizational structures and technology solutions.

It is not enough to drive one-time savings. It is more important to establish effective capabilities within a procurement organization to achieve continual savings.