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CLIENT CASE STUDY


Global brewer: Procurement optimization nets $50 million in post-acquisition value

Accenture Strategy helped a leading global brewer optimize its procurement function post-merger

Overview

When a global brewer decided to acquire a company in a new geography, it turned to Accenture to help it optimize and integrate procurement operations. With proven methodologies and deep skills in strategy and execution, Accenture Strategy developed and launched a new procurement operating model via a two-phase approach.

In the pre-merger phase, Accenture Strategy worked with leaders from both companies in a “clean room” environment to identify cost-saving opportunities, target performance improvements, design the new procurement operating model and formulate solid integration plans. In the post-merger phase, Accenture Strategy rapidly implemented the new model. This involved establishing centralized back-, middle- and front-office procurement capabilities, executing a new transportation strategy, introducing new sourcing capabilities, and implementing a proprietary “closed-loop” zero-based budgeting solution.

With Accenture’s help, the brewer was able to significantly accelerate the realization of value. Within just six months after the acquisition’s completion, the brewer had saved approximately $50 million in procurement costs—and identified another $40 million in future savings.

Opportunity

Through a series of strategic mergers and acquisitions (M&As), the client has expanded its global business to new markets and deftly integrated acquired businesses to take advantage of cost and operational synergies. One aspect of the brewer’s M&A activity that is routinely recognized for its potential value—and its complexity—is procurement integration.

For more than 10 years, Accenture has worked hand-in-hand with the brewer to help it achieve its M&A objectives by defining and transforming its global procurement capabilities. As a result, with each acquisition, the brewer’s sourcing operations have grown stronger and become more efficient.

When the brewer recently set its sights on acquiring a competitor in a new geography, it once again turned to Accenture. It knew that Accenture Strategy would bring the skills needed to establish a new procurement operating model that would help make the acquisition a success.

Outcome

Accenture Strategy quickly deployed a team with deep skills in all areas of sourcing, as well as extensive knowledge of the brewer’s business and objectives. The 18-month transformation was managed in two phases.

In Phase 1, Accenture Strategy set up a “clean room” environment and worked with leaders from both companies to identify and quantify risks and cost-savings opportunities. Collaborative workshops revealed more than 300 improvement opportunities in procurement, as well as logistics, manufacturing, finance and back-office services. These pre-merger actions allowed the team to develop a well-defined strategy and operating model, as well as clear integration plans.

In Phase 2 (post-merger), Accenture Strategy worked with leaders of the merged company to set up and centralize back-, middle- and front-office capabilities. At the same time, Accenture executed a new transportation strategy, introduced new sourcing capabilities, improved the brewer’s use of suppliers, and implemented a proprietary “closed-loop” zero-based budgeting solution that was widely acknowledged by financial markets as a best practice.

With Accenture’s help, the brewer significantly accelerated the value of its most recent merger. Accenture’s pre-merger strategy and planning efforts, along with robust methodologies and implementation skills, allowed the brewer to achieve significant financial gains in just six months. To date:

  • The project’s Control Tower has tracked $35 million in realized savings, with another $42 million in savings identified.

  • More than 40 distinct sourcing process improvements enabled the brewer to create an industry “sourcing engine” that generated nearly $10.5 million in savings in a single year.

  • The new transportation strategy has yielded $4 million in annual savings and generated $70 million in cash flow.

  • New processes have allowed the brewer to shave 7 percent from its domestic Over the Road Transport rates.

Over the years, Accenture has helped the brewer create a market-leading procurement strategy.