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Global Brewer: Transforming the global procurement function

One of the world’s largest brewers is on the path to saving $1 billion over a five-year period through procurement transformation.

Overview

Each year this brewer, one of the largest in the world, spends more than $5 billion on materials—from ingredients such as malt and barley to glass and cans to other essentials such as marketing items and freight.

Historically, it carried out its purchasing activities on a regional level. While this approach had worked well over the years, company leaders believed the company could improve efficiencies and effectiveness by centralizing its procurement functions.

Opportunity
The company had recently established a new global purchasing organization. And while the savings were significant, within two years of the new organization’s launch, less than a third of the brewer’s global spending was being channeled through the new organization. For help in architecting—and then implementing—an integrated global procurement operating model that would leverage its considerable scale and global expertise, the company turned to its long-time service provider, Accenture. Several factors influenced the decision, including Accenture’s deep strategic procurement skills and insights, its team and its reputation for helping other alcoholic beverage companies successfully transform their procurement operating models.

Solution

A team of Accenture procurement specialists quickly set to work redesigning the client’s global procurement operating model to create a highly flexible and innovative organization that could respond quickly to market demands and fluctuations, while fully leveraging the brewer’s buying power.

A transformation blueprint—completed in just eight weeks—was created that focused on improving collaboration among global and regional procurement teams and increasing the ratio of spend control, as well as the geographic and category coverage, administered through the centrally managed procurement organization.

Results
With Accenture’s help, the brewer is leveraging its global reach and expertise to achieve high performance in procurement. The new operating model is enabling the company to manage its procurement in a much more efficient and tax-advantageous way. The solution has positioned procurement not as a cost center, but as one of the value generators for the company. Most importantly, the new operating model for procurement is on track to help the client organization not only channel 80 percent of its procurement spending through a centralized organization, but also enable up to $1 billion in savings in the coming years.