Outsourced Strategic Procurement - Coal Miner

Jim Cowan
Partner, Heavy Industry
Heavy Industry
Strategic Procurement
June 4, 2024
Strategic Spend
Cost Reduction pa

Client Problem

The client does not have a strategic procurement team to manage the strategic areas of procurement such as tenders and sole source negotiations.

Caliba Solution

The client engaged Caliba to manage the complete strategic procurement process, which includes the development of the annual sourcing plan at the completion of the budgeting process, the managementof all strategic supply and services tenders, and the sole source negotiations with current suppliers. Caliba also development a new procurement framework, including the governance of all procurement activities. Included in the services scope is the facilitation of the client contracts committee that approves all sourcing strategies, award recommendations; and extensions of contract term.

The result of the Caliba services is 100%of strategic spend (80% of total spend) under contract at competitive rates. We have benchmarked the rates and prices against other in the market and the client has better than market rates for its size.

The outsourced service has also resulted in an operating cumulative cost reduction of over $15m compared to baseline. Another key benefit of the service is the on-going feedback we receive form Tenderers - “This is one of the most professional tender processes we have been involved in, it was structured well, easy to complete, fair and transparent”.

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