24 September 2022
Topics in this article
  • Retail
  • Strategy & Planning

As one of the world’s largest retailers with a presence in every US state, this company has thousands of stores serving millions of customers weekly.

Challenge

Our retail client acquired approximately 2000 stores from a competitor in North America in a deal valued at over $4bn. There was a strong desire to identify and accelerate synergies from the program.

The procurement team worked at capacity and mainly focused on business-as-usual sourcing activities. However, the additional activity that came with a synergy program would demand an immediate injection of capacity and capability. It also required the experience of running M&A programs, which Proxima was asked to support.

Approach

We deployed a team consisting of procurement specialists and supplier management consultants who knew the client well, and program managers who were familiar with the demands of synergy and integration programs. We provided M&A-specific templates and tools to help order, manage, and track key activity, as well as back-office support to power the on-site team.

The integration process went through four phases;

1) Reviewing

2) Identifying

3) Prioritizing

4) Delivering synergies

Our program team reported directly to the CPO and the integration team. To further support, we provided PMO support for the commercial work streams until the client had identified and assigned an internal resource.

Results

The Synergy program ran for over a year and reported program-level savings of c. $50m across OPEX and CAPEX supplier spending.

Proxima used deep category knowledge and flexible access to skills to execute ~ 60 large projects (with a further portion managed by the client team). We used our expertise to deliver across multiple categories, such as Professional Services, IT, Facilities, Logistics, Operational Consumables, DCs, Pharmacy, and Asset Protection.

Proxima brought proven methodologies and tools, as well as knowledge of our client and key suppliers. This enabled us to accelerate the analysis and benefits identification, and move quickly into delivery:

  • Using a pre-tested M&A toolkit allowed the client to quickly ramp up the program, analysis, and governance. Nothing needed to be built from scratch, and there was clear visibility of data and progress
  • Cover-to-cover contract reviews that pulled 50 key data items from contracts. These were entered into client systems, highlighting scoping opportunities, rebates/ volume commitments, and any contractual restrictions
  • Proxima sourcing leads that were specialists, quickly able to identify not only opportunities to reduce costs but also opportunities to normalize quality and service levels across the joint estate
  • A sourcing strategy for each project and an approach agreed to with stakeholders and signed off in governance, ensuring a joined-up approach, expectations, and outcomes.

About Proxima

We bring a wealth of capability and insight and supply market knowledge to every challenge. Over 30 years as a top procurement consulting firm means we have the exceptional delivery experience to help the world’s leading brands trust Proxima with their business goals.

Get in touch to discover how our procurement specialists can help you achieve supplier savings, optimize your costs, and transform your procurement team.

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