Delivering £119m of supply chain and procurement savings for a public-private defence alliance

Client need

Our client was a jointly-managed partnering relationship between industry and the defence ministry of a major developed nation, responsible for delivering a new class of warships to the country’s navy. We helped the client make substantial savings in its supply chain and procurement operations.

Challenge

The client was facing a significant costs challenge, with 85% of its budgeted spend already committed in a challenging environment, and no additional budget available. Also, the nature of its organisation meant identifying and realising cost savings would be a complex undertaking involving multiple stakeholders.

Focused plan and key actions

Quickly seeing that the client needed to connect its costs with its strategy, our team adopted a Fit for Growth approach. We began by establishing a contingent fee contracting model and a cost savings delivery team with representatives from across the industrial partners. We then analysed budgets and spend against eight cost reduction levers, identifying a prioritised portfolio of 60 opportunities for savings.

Seeing it through

By pursuing the 60 initiatives we’d identified, we helped the client achieve cost savings worth an aggregate £119 in just 10 months. The savings were delivered in areas including tendering, risk mitigation, escalation challenge and reconciliation.