Client: Fast Growing Global Online Retailer

In such fast paced and ever-changing markets as e-commerce, fashion, beauty and lifestyle, our client has delivered consistently on both its significant growth and acquisition strategy ambitions.

In just 15 short years, our client has achieved unprecedented growth to become one of the world’s largest online retailers in beauty and wellbeing combining e-commerce, tech, hosting, translation, and a complete fulfilment infrastructure. Our client really does have everything a brand needs to be global. In fact, this unprecedented growth means it is no longer a new kid on the block, but in fact, an international e-commerce giant that operating in some 169 countries – a true British success story! However, their ambitions continue…our client continues to invest in solid foundations through investment in future talent, infrastructure, and most recently, a €1bn development over two sites at Manchester Airport. As another demonstration of their commitment to the North West of England, this development is the UK’s biggest ever bespoke office project outside of London.

The Challenge

Due to the continued success and aggressive growth of our client a decision was taken that more focus was needed on their indirect procurement spend. As with any retailer, sales margin is key. However, our client wanted a greater focus on managing operating costs and consistency in (supplier) project delivery, whilst ensuring any investment in procurement capability and headcount would provide a net benefit. They reached out to us as they wanted a partner who could evidence this case for change and help create the platform for growing in-house capability, whilst ‘rolling up their sleeves’ to deliver complex and large scale projects at pace.

Whilst the client had grown significantly it was clear from the outset that their understanding of their indirect spend was at a basic level. Due to a lack of investment in a strategic procurement team, the knowledge and understanding of its own supply chain was low, as was its understanding of the services and the service levels being provided. Buying practices were tactical and there was little evidence of a structured approach to challenging indirect spend.

Our client needed us to quickly establish key opportunities that could reduce operating costs; establish consolidation opportunities; and ultimately deliver upon these opportunities through the use of robust procurement and programme management, whilst at the same time supporting the existing procurement team in enhancing their own understanding of the supplier base.

Furthermore, the challenge to tackle our clients third-party spend was compounded by the absence of stakeholder resource. Budget holders, key stakeholders and internal customers faced their own pressures and demands, the time they could commit to a procurement project was limited. It was imperative that we gained an understanding of our clients supply chain quickly and with as minimal impact on our clients resources as possible.

The Aims

  • Demonstrate what strong procurement practices can deliver in terms of value.
  • Focus on leverage spend areas initially to deliver cost savings.
  • Coach and develop existing team members.
  • Integrate with the business stakeholders whilst leading the reviews without impacting too much on their limited time.

Our Strategy

Precise and efficient engagement was key. We needed to learn quickly and make best use of a stakeholder and budget holder group who had a finite amount of resource to dedicate to our activities.

For this reason, our client needed experienced procurement practitioners who could inject their experience into our client’s organisation. Our team have all held senior and strategic roles within organisations that have faced the same challenges as our client. This experience and knowledge were a key criteria for our client (in appointing their procurement partner), and it was the depth of category knowledge that enabled us to quickly deliver a path to real-world and practical opportunities for our client.

Oculus led a series of category workshops, engaging with budget holders and key suppliers to quickly gain a deep understanding of the various categories, the immediate tactical opportunities to be taken advantage of, along with any strategic options which could be explored further.

As with any sourcing activity led by Oculus, a clearly defined sourcing strategy was delivered to our client, for onward execution. Combining robust practices, the experience of our team, and introducing market-leading suppliers would culminate in a fantastic result for our client.

Our Solution

A key part of our solution was to impart knowledge on the existing team of strong procurement processes and techniques to ensure they could adopt these processes on other areas of spend which Oculus were not reviewing.

When reviewing the spend in the selected categories which Oculus were leading, we ensured that all saving opportunities which were discussed in the category workshops were fully explored to maximise our clients cost savings.  In addition, it was paramount for us to not compromise the quality of service in any way from the standards agreed with the stakeholders.   It was also key that we ensured that any suppliers selected by the client through the procurement reviews were capable of working with the client both at present and in the future considering the clients continued growth.

The categories which the client ultimately selected for Oculus to review included:

  • Office and Industrial Cleaning – a large value of spend across 14 of our client’s property estate; as a food manufacturing environment (in part), it was key for this area to have the right suppliers in place.
  • Operational Consumables – an essential and significantly increasing category of spend for the client ensuring that ‘the day job’ can always be delivered.
  • Marketing and Operational Business Print – the delivery of all print within the business from internal print to customer facing print and all brand collateral which was of strategic importance to the client due to the prestige of the brands being managed.

Business Benefits

The success of this engagement can be attributed to both the clients commitment to working with Oculus to achieve their objectives and the pedigree of the Oculus team which has been built on years of knowledge and development within both private companies and procurement consultancy environments.

Large and sustainable savings were seen in the categories of spend which Oculus reviewed and following the completion of the engagement our client made a key decision to invest in a strategic procurement team having now seen the benefits of what a strong procurement offering could deliver.

Following the engagement we were pleased to receive a fantastic testimonial from the Head of Indirect Procurement as follows:

“The unique offering Oculus Procurement provide has been a fantastic building-block for the development of procurement within our business. Whilst capable of operating the full sourcing process they provide real choice for the client, providing business benefits and traditional cost savings”.

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