Medtech Innovator Targets €40M and Builds Indirect Spend Procurement Function

Client Challenge

Facing a healthcare market in perpetual flux, a prominent pharmaceutical group recognised the need to enhance its procurement efficiency to remain competitive. With robust but scattered procurement systems, the organisation was addressing the prospect of aligning its operations with strategic goals to maximise efficiency and leverage economies of scale.

H&Z Approach

To meet this challenge, the company collaborated with H&Z, developing a tailored, strategic approach focused on enhancing procurement operations while respecting the existing strengths of the organisation:

Strategic Alignment:

Initiatives commenced with a thorough assessment of procurement practices to ensure alignment with long-term strategic objectives and ambitious savings targets set for 2026. This phase identified areas for improvement and charted a clear path forward.
 

Operational Streamlining: 

H&Z partnered with the company to redesign the procurement organisation, governance structures, mandates, roles, and responsibilities.

Value Creation Plan: 

A detailed plan was formulated for 12 indirect categories, including Operating Consumables, Facility Services, and Temporary Labour. Lever workshops were conducted to advance the maturity of these categories, identifying approximately €40 million in additional savings potential.

Implementation and Change Management:

H&Z managed the transition by addressing internal dynamics and varying levels of process maturity, ensuring seamless integration of new strategies. Close coordination with senior management aligned changes with broader corporate objectives.

Results

The strategic initiatives implemented by H&Z delivered compelling outcomes:

Enhanced Efficiency: 

The redefined procurement processes led to improved operational efficiencies, enabling the organisation to allocate resources more effectively and reduce overall expenditures.
 

Cost Savings: 

By consolidating procurement activities, the organisation was able to capitalise on its buying power, achieving substantial long-term savings that exceeded initial projections of €40M.
 

Increased Transparency and Control: 

The new centralised approach provided greater visibility and control over procurement activities, helping to eliminate redundancies and optimise spending across the board. A reporting culture was established, significantly increasing data transparency of indirect spend volume.
 

Cultural Transformation: 

The project also fostered a strategic procurement culture that aligned with the organisation’s goals, ensuring the sustainability and continued success of the new procurement model.