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Cost Optimization

PIR have over 20 years experience of running both complex and more straightforward cost optimization initiatives. The ability to take out cost is a central part of improving any margin. With experience of more than 1000 projects PIR has attacked a majority of spend categories and fine-tuned levers for each of these. Our methodology for cost optimization is not just an elevator pitch, you get practical solutions, feet on the ground, and both top- and bottom-line result.

Our Solutions for Cost Optimization

We have structured best-practice, benchmarks and lessons learned from our extensive project experience, hence ensuring that we deliver each project with accumulated knowledge, bespoke to our clients’ needs.

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You can’t make good decisions with bad data. The basis of all fact-based procurement work is a Spend analysis that answers the questions; who is buying? what do we buy? where and with whom are we buying? PIR will support your organization in turning the messy data into tangible opportunities with a proven spend analysis process.

We use our value lever tree to conduct a detailed analysis of each category to identify and verify savings potential. We use a proven workshop methodology where key stakeholders, category owners and PIR’s category experts gets together in a structured process to work through each category and challenge existing ways of working to generate cost savings initiatives. When this is done a savings initiative plan is created to realize identified savings.

PIR’s strategic sourcing process is constructed to establish supplier contracts that reduce cost, add value and mitigates risks. Our skilled consultants will work together with your organization to evaluate the potential in all supplier contracts.

We will work with your team to define the demand and provide our input to the market analysis to be able to choose a sourcing strategy using our proven category knowledge, benchmarks and well proven negotiation strategies. We will also provide continues transparent and follow-up of savings in scope and generated by using tools and a proven measuring method for following savings in five confidence levels from ide to bottom line effect. 

Optimizing cost is not only done through lengthy RFP processes. PIR has over the years successfully re-negotiated mid-term contracts with improved pricing, better terms & conditions or a combination of both through its Speed Sourcing process. The impact is immediate giving the customer quick wins often within current fiscal year. Having perfected the Speed Sourcing process over the years and with PIR’s own legal team to support most contracts in scope are re-negotiated and updated after just one session with each vendor making it a valuable and efficient part of many cost optimization projects.

Cost Optimization Engagements

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Insights in Cost Optimization

  • Insight

    Advanced Analytics

    One of the most important Procurement capabilities is analytics, from spend analysis to savings tracking, it enables the Procurement function to create transparency that ensures value capture and avoid value leakage. Advanced analytics should provide Procurement Done Right professionals with actionable insight and foresight.

  • Insight

    Cost Out – Value In

    A Procurement Done Right functions of today needs to balance the instituted cost focus with possibilities to leverage the supplier base to add value. A Category Management approach is a proven methodology to use for cross-functional teams to address spend categories with the objective to optimize cost. A more collaborative approach with Supplier Relationship Management is a great way to balance the cost focus with possibilities to drive improvements and encourage innovation.

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Discover More Solutions

Solution

Sourcing Advisory

PIR supports clients in all stages of the sourcing lifecycle, from strategy, through design and sourcing, transition as well as reevaluation of existing positions and building own capabilities.

Solution

Legal Advisory

During our strategic sourcing process, we go all the way to ensure real supplier contracts. We utilize our intellectual property in form of contract templates to create bespoke client supplier contracts.

Solution

Procurement transformation

PIR has extensive experience of transforming sourcing and procurement organizations on strategic, tactical and operational levels.