Case Interviews
How should I approach a procurement cost-reduction case?
I have a procurement cost-reduction case coming up and have found very few practice examples. What should I focus on when approaching this kind of problem?
Ian’s Answer
This is really a subset of operations
Remember for procurement/supply chain, first you need to ask objective. In general this will either be "Reducing Costs" or "Fixing/Optimizing Production"
Within Reducing Costs, this could be contract renegotiation, finding new supplies, locking in futures contracts, automating processes (replace labor), changing transport methods, etc.
Within Optimizing Production, this could be a lot of the same i.e. automating processes, finding new suppliers, changing transport methods
Generally, you'll want to segment the supply chain/procurement process to identify problems (i.e. where taking the longest or costing the most).