Executive Briefings

Pfizer Saves $370m By Reorganizing Its Procurement Department, Strategy

Changes at Pfizer Inc., including a series of acquisitions and the creation of a centralized procurement organization, prompted supply management leaders to seize the opportunity for deeper procurement penetration in some of the more nontraditional spend areas of consulting, legal and financial services. Pfizer's Worldwide Procurement organization formed a new professional services team to focus on those three areas, known as knowledge management services, to increase services, savings and success for the company.

From October 2007 through September 2010, the team's efforts resulted in savings of $370m, with an annual average savings of 14 percent. This is well beyond the average savings of 5 percent to 7 percent for indirect materials and services cited in research from The Hackett Group.

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Changes at Pfizer Inc., including a series of acquisitions and the creation of a centralized procurement organization, prompted supply management leaders to seize the opportunity for deeper procurement penetration in some of the more nontraditional spend areas of consulting, legal and financial services. Pfizer's Worldwide Procurement organization formed a new professional services team to focus on those three areas, known as knowledge management services, to increase services, savings and success for the company.

From October 2007 through September 2010, the team's efforts resulted in savings of $370m, with an annual average savings of 14 percent. This is well beyond the average savings of 5 percent to 7 percent for indirect materials and services cited in research from The Hackett Group.

Read Full Article