Procurement Transformation
Philips
Transformed procurement to a competitive advantage and delivered year-over-year savings.
Challenge
Immature procurement functions act as tactical order processors rather than strategic partners.
Consequences included supply disruptions halting production, delayed NPIs jeopardizing revenue, and unchecked cost increases from inflation and poor supplier leverage.
Actions
Built a strategic procurement function with advanced commodity strategies, strategic supplier alliances, Booster Events, and Game Theory negotiations.
Embedded Procurement Engineering practices such as early supplier involvement, DfX, and APQP to enable first-time-right launches.
Integrated indirect procurement into corporate strategies and established global sourcing frameworks based on total cost of ownership.
Digitized procurement to automate processes, enabling advanced analytics and AI-driven decision-making.
Recruited and developed a best-in-class team, embedding procurement in strategic planning and execution.
Results
Procurement earned a seat at the management table as a trusted partner in business planning.
Delivered year-over-year savings at the top of industry benchmarks (7.5% at Philips).
Enabled faster, first-time-right NPIs with at least 15% cost reduction.
Optimized the global supply chain, lowering cost and business risk.
Streamlined indirect procurement, reducing cost and improving service levels.