Challenge
The bank’s indirect procurement, particularly in office supplies, was managed internally by a six-person department. This process involved collecting requirements from all branches, negotiating terms with vendors, and placing orders—an effort-intensive activity diverting resources from the bank’s core operations. The client sought an outsourcing solution to optimize costs, reduce workload, and improve efficiency while maintaining a single-vendor system and adhering to an annual budget.
Our Approach
1. Initial Analysis
- Collaborated with the client to gather information on current office supply requirements, consumption patterns, and purchasing volumes across branches.
- Identified that demand was largely stable across branches but subject to fluctuations due to branch openings or closures.
2. Process Design
- Maintained sourcing continuity with existing vendors during the transition.
- Developed a tender process for annual contracts, ensuring bids included mandatory branch-level distribution
3. Tender Management
- Prepared comprehensive RFQ (Request for Quotation) documentation to streamline the bidding process.
- Reviewed offers, selecting two vendors for final negotiations based on cost, service level, and distribution capabilities.
4. Implementation
- Awarded the contract to the most competitive vendor after negotiations.
- Introduced monthly branch-specific ordering managed by the outsourcing team to simplify operations for the bank.
Results
- Cost Savings: Achieved a 5% reduction in office supply expenses through enhanced vendor negotiation and streamlined procurement.
- Efficiency Gains: The procurement team’s headcount was reduced by 50%, and they were replaced with an outsourcing solution at 40% lower operational costs.
- Enhanced Focus: Enabled the bank to redirect internal resources toward strategic, revenue-generating activities.
