Purchasing Interim Management Case Study
This is a case study of an interim purchasing assignment within two financial services business that had merged to become the largest in the UK.
Delivering Post Merger Integration Synergies
The purpose of the assignment was to deliver post merger integration synergies.
Duration of the Interim Management Job
1 year - for the category considered in the example below.
Client's Return on Investment
More than fifty times or 5,000% for the category quoted below.
Background to the Interim Management Job
During the post-merger integration, the client was targeting the delivery of many tens of millions of pounds in purchased synergies across a large number of categories. Key to making this programme a success was the introduction of formal programme management and project management organisational structures. The Prince 2 programme management and project management methodology was used, to track the progress of each dedicated category team's delivery of targeted synergies. Each major category was managed by a multi-disciplinary team and typically comprised:
- Category Project Manager
- Purchasing Manager/s
- Project Administrator
The existing full-time purchasing team/s were significantly under-resourced given the scale of the programme. As such, executive interim managers took up interim management roles as category project managers and category purchasing managers.
Purchased Category Addressed During Interim Management Job
A highly specialist professional service.
Dimensions of the Interim Management Job
More than £100m category spend - one of the business' most strategic.
UK wide.
The multi-disciplinary team who delivered the synergies for this category comprised of:
- an executive interim purchasing manager
- two (permanent) supplier relationship managers
- an interim project manager
- a permanent project administrator
Part way through the assignment, the executive interim purchasing manager was joined by, and ultimately handed over to a newly recruited Head of Purchasing for the category.
Executive Interim Purchasing Manager's Achievements
- Obtained client buy-in to process to deliver category synergies
- Refocused team on managing total acquisition cost of service, not just price.
- Gained stakeholder consensus for initial supplier short-list
- Led detailed multi-disciplinary capability analyses of short-listed suppliers
- Developed an industry leading performance evaluation system in conjunction with key suppliers which factored in total acquisition costs
- Implemented performance evaluation system and ongoing comparisons of supplier performance/value for money
- Developed value improvement and total acquisition cost reduction plans with short-listed suppliers
- Selected supplier panel based upon value improvement / total acquisition cost reduction plans
- Structured supplier incentives to improve value / reduce total acquisition costs
- Developed formal contracts which embodied the incentive mechanisms
- Obtained independent finance sign off for savings of £15m following audit.
- Exceeded targeted synergies for Phase 1 by almost 100%
- Targeted Phase 2 savings for an additional £ 3m.
- Outsourced 59 employees under TUPE
- Handed over successfully to category's new and permanent Head of Purchasing
Other
Despite the fact that this particular professional services category was very industry specific, the client benefited more from using an executive interim manager who was NOT a specialist in that category. The executive interim purchasing manager's fresh perspective and approach addressed the total acquisition costs, rather than just the price of the service; the approach traditionally used throughout the industry. This was of fundamental importance in over-delivering against the category synergy targets and demonstrating just what interim management as an approach can achieve.
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