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<v ->Today, process industries find themselves</v>

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in a stagnating macroeconomic environment.

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We have a situation where cost is the core focus

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of customers along the entire value chain.

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At the same time,

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procurement makes 60% of the total revenues,

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which means it's a huge lever.

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<v ->After a period of strong inflation,</v>

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now, producer prices are declining.

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This gives companies a crucial,

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but limited window of opportunity

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to address procurement, to renegotiate with suppliers,

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and to set a new baseline in terms of costs.

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Typically, we see the opportunity

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in a procurement transformation

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to drive 2 to 4% EBIT improvement,

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which needs to be tackled rapidly.

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<v ->I have experienced firsthand the value BCG can deliver</v>

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through a global, comprehensive,

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cross-functional procurement cost-out program.

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Most recently, I was chief procurement officer

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at a construction chemicals company

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with a decentralized org structure

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and a highly fragmented spend scattered

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across more than 60 countries.

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Faced with this complex challenge, we collaborated with BCG

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to implement a global cost-out program

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that played a significant role enabling us

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to increase the value of the company

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by more than 2 billion euros in just over one year.

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Overall, we achieved a 6% cost savings

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in an extremely short period of time.

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<v ->In the last five years,</v>

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we've helped around 1,500 companies

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to improve their procurement setup.

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In that, we have a very structured approach

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by different supplier segments.

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For the top 20 to 40 suppliers,

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we find individual approaches that not only focus on cost,

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but jointly, we work on the specification setup

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and the overall process of delivery.

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Then, for the wider vast majority of suppliers,

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we use AI-driven tools

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to always find the best negotiation technique,

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and we actually support our clients

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to drive hands-on negotiations jointly with them.

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In addition to the commercial levers,

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we drive a technical optimization

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with a category lens looking at the entire spend

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next to the supplier lens.

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What's crucial here is,

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we have great experts who know the specifications

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in the industry,

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who know the delivery setups in the industry.

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If, for example, you have price shifts

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between different input factors,

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we right away come to suggestions of new formulations.

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We reduce complexity, we increase productivity.

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<v ->So instead of taking the first weeks and months</v>

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for backroom analysis, we go straight into pilot projects,

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lighthouses, and quick wins

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that demonstrate to the organization

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the impact we will have along the journey.

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We also ensure a governance process

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that makes sure the savings land not only on paper,

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but also in the bottom line of the company,

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so rigorously tracking the implementation of savings.

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With this approach,

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we ensure an ROI of our consulting projects

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of more than 10x over the entire transformation journey.

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Finding the best approach

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to quickly reduce procurement costs, to improve EBIT,

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and at the same time,

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to manage quality, smooth operations and risks

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is a complex undertaking.

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<v ->We as BCG have 600 experts worldwide in 34 countries</v>

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to find the best tailored solution in each supply setup

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to improve the overall effectiveness

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of every process industry company.

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