A global provider of Aerospace products headquartered in Chicago, IL, needed help developing a furniture Contract Strategic Plan (CSP) as the company approached the expiration of their current contracts. The company was concerned with the following:
- Fixation with going offshore to take advantage of perceived pricing advantages.
- Multiple suppliers spread across enterprise.
- Design & install costs vary by supplier.
- No formal governance process and lack of budgeting tools.
To help the company address their concerns, MetaExpert Tino led a cross-functional team to develop a CSP that included Defining Contract Objectives and goals, building a service delivery model, creating requirements aligned with objectives, defining the procurement strategy, and outlining the RFP structure. Tino helped the team define the evaluation criteria which included:
- Establishing furniture goals and objectives including best overall value, forward-thinking compliant system, and highly-effective integrated program for end users.
- Conducting extensive market research to alleviate concerns regarding proposed contracting exclusively with North American suppliers. This validated that contracting with North American suppliers was the preferred industry approach.
- Developing a contract strategy to compete with current furniture incumbents to target core competencies, domestic contracts to include international component, drive to standard installation cost model and increase payment term to net 120 days.
With Tino’s expertise, the company’s concerns were addressed and they were able to move forward with their Contract Strategy which resulted in,
- Increase discount of 8% (81% average).
- Estimated $2.5M annual savings.
- Established standardized design & install costs (% based on furniture costs).
In addition, work surfaces were retrofitted to include raising and lowering of surface which saved $2,100, 23% of the existing supply base was rationalized by consolidating requirements, and the company established web-based supplier portals that provide visibility and transparency to budgetary pricing.
By enlisting the expertise of a MetaExpert like Tino for just 120 days, the company will see a phenomenal return on their investment with an estimated annual cost savings of $2.5 million. But, the benefits are more than just financial. Tino’s efforts also garnered improvements in the following areas:
- Service-Delivery Model
- Governance – Established QBR’s
- Established Service Level Agreements
- Ability for end-user to project budgetary estimates