10 Procurement Case Studies: Examples & Lessons Learned
Effective procurement practices are necessary across all industries. By examining procurement case studies in various sectors, from non-profit to technology, healthcare, and beyond, we gain valuable insights into the impact of procurement solutions and best practices that can drive success in any industry.
Explore a range of case studies that showcase how organizations have leveraged innovative procurement strategies to overcome challenges and enhance overall efficiency:
Real-life examples from different sectors
By examining procurement case studies from different sectors, we uncover how organizations have leveraged innovative solutions to address challenges, optimize operations, and achieve better results.
1. Energy & utilities sector
Problem
A leading utility company faced significant supply chain constraints that extended lead times for crucial transformers and electrical equipment to over two years.1
Solution
A procurement software vendor partnered with the utility company to secure future production slots, negotiate favorable contract terms, and streamline internal processes. This collaboration resulted in a 5% cost reduction through competitive bidding, standardized pricing adjustments, and the creation of unique material codes for better forecasting and budgeting in future projects.
Lessons learned
The case highlights the importance of strategic supplier partnerships, direct negotiations to mitigate supply risk, and the value of streamlining internal processes to improve efficiency and cost savings in procurement.
2. Oil & gas sector
Problem
A leading global oil and gas company faced inefficiencies, data silos, and governance issues in its procurement process due to reliance on outdated solutions, which led to delays, a lack of visibility, and an overly complex approval system.2
Solution
The procurement software vendor implemented its intelligent category management (ICM) system, consolidating the outdated solutions into two centralized systems. This solution digitized contracts, increased eSourcing adoption by 20%, and improved procurement ROI by 15%.
Lessons learned
The case demonstrates the benefits of improvement of outdated solutions by consolidating and centralizing procurement systems, leveraging real-time data and insights for strategic decision-making, and using intelligent category management to improve efficiency, cost savings, and risk management in procurement.
3. Healthcare sector
Problem
Memorial Hospital of Sweetwater County experienced frequent system failures and limited access to budget details during the purchasing process due to a problematic general ledger system, leading to workflow interruptions.3
Solution
The hospital partnered with a procurement software provided a requisition solution that offered accurate budget reporting, visibility and transparency throughout the purchasing process, and seamless integration with the hospital’s materials management and ERP systems. This led to improved processing times, reduced errors, and enhanced efficiency.
Lessons learned
The case underscores the importance of adopting tailored procurement solutions to overcome system inefficiencies, reduce errors, and streamline operations, leading to significant improvements in budgeting, transparency, and procurement professionals’ satisfaction. Technology can help procurement teams streamline their processes and improve communication with different suppliers.
For more information, check Healthcare Procurement Challenges & Effective Solutions.
4. Non-profit sector
Problem
Central Park Conservancy faced a chaotic ordering due to a paper-based requisition system, which leads to hindered tracking, approvals, and efficient order placement.4
Solution
The procurement software vendor provided an integrated procurement software solution that included customized workflows, and audit trails, enabling accurate tracking of expenditures, encumbrances, and accruals.
Lessons learned
Procurement software implementation significantly streamlined the procurement process, reinforced purchasing policies, and enhanced spend management, leading to improved efficiency, time savings, and better control over financial operations.
For more information, check Nonprofit Procurement: Checklist & Challenges.
5. Financial sector
Problem
Hellenic Bank experienced a lack of standardization, centralization, and digitalization in its procurement processes, leading to inefficiencies, and high costs. The process also needs improved compliance with regulatory requirements. 5
Solution
The bank implemented an AI-powered source-to-pay software to centralize procurement activities, and integrate key processes such as supplier management, and contract management.
For more information, check 10 AI Procurement Use Cases & Case Studies.
Lessons learned
The implementation of the procurement tool led to a significant transformation in procurement operations at Hellenic Bank, resulting in standardized processes, enhanced visibility, reduced cycle times, stronger supplier partnerships, and strategic insights. The bank also anticipates further benefits, including cost reductions and improved compliance, as they fully integrate their procurement activities on a single platform.
6. Construction sector
Problem
High Speed 2 Ltd. faced the greatest challenge of achieving supply chain transparency and resiliency for the UK’s largest infrastructure project. This involved managing a large number of suppliers and contractors in a complex market, with costs and risks exacerbated by external factors like hyperinflation and labor shortages.6
Solution
HS2 implemented the supply chain management initiative, involved mapping and assessing critical contracts and suppliers across multiple tiers, leveraging dashboards and innovative methods to deliver valuable insights into the supply chain.
Lessons learned
The case study shows that commitment to collaboration and proactive risk management can achieve significant advancements in supply chain transparency, maintaining quality, and ensuring better deals for organizations. HS2’s successful development of supply chain management allowed them to focus on immediate needs, securing value for taxpayers by understanding and managing risks in real-time.
7. Chemical sector
Problem
Bioscience company Royal DSM N.V. (DSM)’s indirect procurement processes were leading to inefficiencies and excessive time spent on operational tasks, detracting from value-creating activities. The purchase-to-pay process was also suboptimal, causing payment delays introducing risk.7
Solution
DSM implemented a procurement software solution to digitalize and automate procurement transactions. This included a comprehensive source-to-pay process supported by a robust governance structure and global rollout, starting with a pilot in Brazil to navigate complex tax regulations.
Lessons learned
Effective change management and extensive training, including local language support, were crucial for the successful adoption and deployment of the new procurement processes.
8. Transportation sector
Problem
Transport for London (TfL) experienced a severe skills shortage and lack of diversity in the transport industry, with a workforce predominantly composed of older white males, while a significant portion of young Londoners were unemployed or out of education.8
Solution
TfL established the Supplier Skills Team and implemented Strategic Labour Needs and Training (SLNT) requirements in contracts. This approach required suppliers to deliver specific skills and employment outputs, with a focus on apprenticeships and job starts for disadvantaged groups. TfL also partnered with charities and employability groups to support these efforts.
Lessons learned
Successful outcomes were driven by strong internal buy-in, clear communication of goals with suppliers, effective partnerships with the right organizations, and recognition of achievements. TfL’s approach has led to thousands of apprenticeships, job placements, and the employment of disadvantaged individuals, setting a standard now being adopted by other public sector bodies.
9. Technology sector
Problem
Jumio faced challenges in managing its procurement and accounts payable processes, particularly with manual purchase order (PO) matching, which caused bottlenecks and inefficiencies, especially as the company scaled globally across multiple subsidiaries.9
Solution
Jumio implemented an integrated procure-to-pay finance automation solution, which automated PO and invoice processing, self-service supplier onboarding, and improved month-end reconciliation.
Lessons learned
Automation of procurement and accounts payable processes significantly reduced workload, improved efficiency by eliminating manual tasks, accelerated financial reconciliation, and ensured seamless integration with their ERP system.
10. Education sector
Problem
Pearson, a global leader in education, struggled with disjointed procurement systems that lacked comprehensive spend visibility and compliance enforcement, hindering strategic decision-making.10
Solution
Pearson partnered with a business spend management platform to unify their procurement processes, improve risk management, enhance compliance, and achieve better deals, with a focus on user-friendly adoption.
Lessons learned
The integration of the procurement software platform significantly increased spend compliance from 22% to 85%, reduced operational inefficiencies, and resulted in high user satisfaction, demonstrating the value of streamlined procurement processes.
Summary of lessons learned from the procurement case studies
- Procurement software integration significantly increased spend compliance and reduced operational inefficiencies.
- Automation improved efficiency, reduced manual tasks, and streamlined financial processes.
- Effective change management and training were crucial for successful adoption.
- Commitment to collaboration and proactive risk management enhanced supply chain transparency and efficiency.
- Centralizing procurement systems and using real-time data led to better decision-making and cost savings.
FAQs
Further Readings
- Top 10 Procurement Software Features & Prices Analyzed
- 10 AI Procurement Use Cases & Case Studies
- Non-profit procurement: Checklist & Challenges
- Healthcare Procurement Challenges & Effective Solutions
- Procurement Software Comparison, Testing & Benchmarking
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Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE and NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and resources that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised enterprises on their technology decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
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