Lean Procurement Solutions

Lean Procurement Solutions

Delivering Earnings Improvement

LeanProcurement Solutions (LPS) is a division of Habif, Arogeti & Wynne, LLP focused exclusively on strategic sourcing and procurement-related cost reduction. We will review a company’s purchasing in selected areas and compare the pricing they receive to best market pricing. Through this process, we will identify opportunities for cost reduction, and recommend areas where improvements can be made. We can also work with the company to implement the recommendations

Typical Client Profile

LPS works with clients across most industries including manufacturers, distributors, financial and commercial services firms, franchised operations, printers, and private equity firms. Our clients range in size from $15 million to $500 million in revenue. However, it is important to note that a company’s non-payroll expenditures are more important than revenues in determining whether we can effectively drive a strong return on investment. Here are a few key factors common to our clients:

Expenditures of over $1 million concentrated in one area (for example, in small package shipping—see list below); or
Total non-payroll expenditures over $10 million that would be available for sourcing projects

Spending Categories where LeanProcurement Solutions has Consistently had Success:

Transportation
Small parcel, LTL, truckload, and ocean freight

Fulfillment & Distribution Outsourcing
Third-party logistics sourcing

Administrative Products
Office Supplies, travel, etc.

Telecommunications & IT
Voice, data, and wireless, and IT hardware and software

Print & Packaging
Commercial print, paper, direct mail, invoice print/mail, inks, labels, packaging, corrugated, etc.

Manufactured Components
Sourced domestically or in China, India, Korea, E. Europe, S. America, etc.

Raw Materials
Metals, rubber, plastics, chemicals, etc.

Others:
Temporary labor, outsourced services, capital equipment, fleet, MRO supplies, and many others

We have also applied our methodology to categories that are ‘new’ for us. Recent examples include: $15 million in dental supplies, pressure-sensitive labels, garbage cans, chicken, desserts, sliced apples, software selection, and outsourcing of call centers.

Results

LPS analyzed our inbound and outbound shipping patterns. They then prepared a consolidated RFP and took it to market for us. We have since negotiated a new shipping contract resulting in six figure savings.
Evan Toporak
COO, Alternative Apparel

LPS has an unblemished track record of delivering a positive ROI for its clients and has a 100% client reference rate.

Average client ROI in over past 2 years exceeded 500%; Payback period for projects averaged 3 months or less
Average savings in Indirect Spend (non-manufacturing) was over 20%
Average Transportation Spend Savings: Small Parcel (20+%), LTL (20+%), Truckload (15%), Ocean Freight (12%)
Range of Direct Material Savings: 5-13%
Our sourcing efforts have had a 10+% EBITDA improvement for many clients

LeanProcurement Solution’s Approach

LPS invests in relationships with qualified prospective clients, often performing an initial assessment and/or benchmarking to ensure its ability to drive results. We typically charge either hourly consulting fees or Performance Fees where we are paid a percentage of the savings created by our projects. For example, the market is very attractive right now for transportation sourcing. We can quickly benchmark a company’s current rates to measure and validate the opportunity from strategic sourcing.

Our fees are typically funded by cost savings that come from negotiations with suppliers. As a result, our projects are normally budget neutral and are quickly cash flow positive. Given the rapid payback period (2-4 months), if we can execute a project faster than our client could do it themselves, we pay for ourselves and free the client to focus on more strategic areas

Other Services beyond Strategic Sourcing

Procurement Process Redesign and Organization Development
Spend Analysis: We can convert expenditure data across multiple systems into a clear cost reduction road map.
Spend Management: Compliance, demand management, contract auditing, and supplier management.
Pre-Purchase Procurement Due Diligence: Understand potential savings as part of an acquisition strategy.
Post-M&A Procurement Integration: We can unlock value due to increased volumes and procurement synergies.
Make or Buy/Outsourcing Analysis: We excel at complex analysis in support of strategic decision making.

About Us

LPS’s services are provided through a joint venture with Insight Sourcing Group an Atlanta-based management consulting firm led by alumni of large consulting organizations such as Deloitte Consulting, A.T. Kearney, and Accenture. Founded in 2002, ISG blends the capabilities and professionalism of the larger firms with an entrepreneurial flexibility and focus on results.

Contact Us for an Exploratory Discussion

Richard Kopelman, Partner
404-898-8236 richard.kopelman@hawcpa.com

Tom Beaty, Partner
770-481-3010, tbeaty@insightsourcing.com

If you have a client you think might be a fit or have any questions, please do not hesitate to call for a brief discussion.