$250 Million Commercial Services
Company: 15% EBITDA Improvement
Business Challenge
A fast-growing company executed an average of 13 acquisitions a year. The company
recognized that with 120 locations, its decentralized procurement approach had
become costly and inefficient. ISG was engaged to drive earnings improvement
and to help develop a procurement competency.
Approach
Center-led sourcing was a new concept for this client's independent-minded branch
managers. ISG initially sourced 'non-threatening' categories, yielding noticeable
savings and implementing with over 95% compliance. More complex and sensitive
projects came next. Over multiple years, the company built out its procurement
organization and still leverages ISG's expertise regularly.
Results: Long Term Relationship Yields Measurable P&L Impact
ISG performed many projects, sourcing some categories twice over the relationship.
Average savings exceeded 24% and included categories such as Temp Labor, Temporary
Drivers, Uniforms, Corrugated Boxes, Office Supplies, CRM Software, Outsourcing
of Invoice Print & Mail, Commercial Print, Telecommunications, Plastic Bins,
and many others.
Other Results:
- ISG developed a new acquisition 'on-boarding' guide and process designed
to quickly roll out the many sourcing contracts to newly purchased branches.
- For the Plastic Bins project, ISG explored buying custom designed and molded
bins to offer a competitive advantage to our client.
- For the first Uniforms project, ISG consolidated hundreds of SKUs (unique
items) into a manageable number of standard items, improving consistency and
cutting costs.
- For the second Uniforms project, ISG facilitated the movement from a lease
program to purchase and helped with a significant uniforms redesign.
- For Temp Labor, ISG helped extend HR policies such as drug and background
screening into the field, eliminating potential risks. The project also eliminated
nearly 5,000 paper invoices a year.
This company was ISG's first client. Five years later, they remain an ISG client,
having recently engaged ISG to perform several sourcing projects and a Spend
Analysis.
