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filler@godaddy.com
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filler@godaddy.com
The client was a large automotive dealership group with 23 franchises consisting of mass market OEM brands & self-branded used car dealerships. The size of the organisation had increased significantly through recent acquisitions & site expansions, including into regional Qld. Although some centralised sourcing had occurred, the organisation predominately operated under a decentralised structure, with dealerships responsible for their own sourcing.
The client identified that the recent growth & organisation structure created an opportunity to improve costs and sought the assistance of Spend Solutions to assist identify savings opportunities.
Spend Solutions was engaged to conduct a thorough Supplier Savings Analysis. The brief was to uncover savings opportunities through improved sourcing, obtaining better pricing & better utilisation of how products & services were used internally.
Categorisation of spend provided insight into what & with whom purchases had been made & facilitated a three-way analysis to identify cost savings opportunities. Firstly, by developing strategies for key spend categories that sought to balance immediate savings versus developing long term strategies. Secondly, through conducting a commercial analysis of key suppliers against market & competitor benchmarks to quantify savings opportunities. Lastly, through conducting interviews with internal stakeholders to identify savings opportunities through better utilisation of products & services.
In total, Spend Solutions identified 34 savings opportunities with a projected annual P&L savings of approximately $2m, with key target areas in IT, workshop & facilities. The savings split was 20% direct negotiations & 80% market consultation, reflecting the fragmented nature of current sourcing & ability to leverage the clients’ combined size. The report was delivered as a simple, easy-to-read presentation that made it easy for Management to understand how the savings opportunities were generated, the strategic rationale & anticipated actions to achieve each project.
Overall, the Supplier Savings Analysis provided the client with key insights into savings opportunities within their business that they would have otherwise not been able to obtain. Importantly, it allowed the client to develop a roadmap to prioritise & action projects based on the level of savings & difficulty, thus providing a platform to plan, budget & execute savings opportunities within a structured framework.