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Single Complex Sourcing Event Saves Fortune 500 Life Sciences Company $3.5 Million Across Distributed Business Units

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PROFILEA global pharmaceutical and life sciences company—home to nearly 150,000 employees—takes in over $50 billion USD annually across its many business units. In the United States, this company’s divisions often operated separately in their sourcing and distribution activities, meaning best practices, negotiated discounts, and innovative efficiencies were not shared between them.

CHALLENGETwo US-based business units of this firm looked to utilize the company’s longstanding partnership with JAGGAER in Europe to more effectively work with one another for a standard truckload event in North America. At the recommendation of their home offices, these divisions came to JAGGAER with two goals in mind: to consolidate

the number of suppliers they use for this type of trucking event, and to maximize cost savings in the process.Since the two divisions remained disjointed when it came to transportation and supplier relationships, often using different systems and metrics, it was impossible for them to share data, find common ground for best practices, or even see if there were supplier redundancies that could be consolidated.Before the two divisions could unite to accept lane bids for a combined and complex event, they needed to standardize their data so they could communicate with each other in a meaningful way and share analyses of supplier performance, lane details, as well as price and non-price factors for each. Given the goal to consolidate suppliers, an apples-to-apples comparison was necessary for them to move forward.

“Thanks to the ability we now have to extract data from standard truckload events with advanced sourcing tools from JAGGAER, and the ease with which we can do so, we’re eager to utilize the tool more frequently and in new ways in the future, even outside of transportation events. It’s that much of a game-changer.” — US VP of Logistics

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streamline the number of suppliers by 30%. The organization is now looking to utilize JAGGAER’s advanced sourcing optimization tool for other US events. “Thanks to the ability we now have to extract data from standard truckload events with advanced sourcing tools from JAGGAER, and the ease with which we can do so, we’re eager to utilize the tool more frequently and in new ways in the future, even outside of transportation events,” said the VP of Logistics for the company’s US branch. “It’s that much of a game-changer.”

which suppliers could be measured and analyzed with ease. The advanced sourcing optimization tool was able to scale for as many suppliers and scenarios as were needed to remove the complexity of the transportation and logistics data for not just one, but two disparate divisions with sometimes differing requirements.This analysis provided useful feedback to suppliers and drove prices toward a target rate in the second round.JAGGAER’s expert staff was on hand to help the company set up standard reporting that provided actionable, clear, and useful analytic insights that enabled the company to improve its internal reports to leadership. Even after awarding bids in the sourcing optimization system, suppliers were given access to the tool to see which lanes they were awarded as a result of their bid. This allowed the company to keep all lane information centralized as well as safeguard against the errors or embarrassments that can sometimes come along with users having to manually create award files to send to suppliers,

BOTTOM LINE RESULTS• Reduced supplier count for event by

30 percent through consolidation

• Over 9% cost savings in awarded lanes

• Data standardized across divisions in less than one month

such as incomplete or incorrect information or the award being sent to the wrong supplier. In JAGGAER’s advanced sourcing optimization tool, all the data is centrally stored and easily reviewable by both parties.As a result of the solution’s ability to effectively standardize the data of both divisions and optimize their bidding processes with complex scenario analysis and streamlined processes, both of the company’s goals were met. In the tool, savings were clearly visible—upwards of a 9% cost reduction, totaling nearly $3.5 million— and they were able to

SOLUTIONThe company worked with JAGGAER to conduct a full, guided event. JAGGAER’s advanced sourcing solution first helped the company standardize their supplier and lane data in less than a month, building a framework for the event. Then, the company was able to invite suppliers to bid, run the bidding rounds, and award lanes all through the solution. Conducting these activities in one tool created significant efficiencies, especially as opposed to manual processes the company relied on earlier. All the data was collected and could be analyzed right in the solution, and the decisions resulting from this analysis could be enacted right in the tool itself, making strategic sourcing decisions clear, fast, and easy.Through two rounds of bidding, the company had their own internal metrics they intended to meet, which were easily facilitated in JAGGAER’s advanced sourcing solution. In the first round, the organization collected data on all sorts of logistical details by

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