A pivotal moment for a global leader
International Flavors and Fragrances (IFF) is an industry leader in food, beverage, scent, health, and biosciences. Their additives give taste and nutrition boosts to breads, cookies, crackers, mixes, flavor packets, drinks, etc., while their fragrances bring olfactory appeal to detergents, sprays, scented candles, colognes and perfumes, and much more. IFF is the quintessential company you don’t hear about but that affects almost everybody’s life.
After acquiring several businesses, IFF needed to align procurement systems to achieve scale and efficiency. The company asked KPMG to improve its Indirect Materials & Services (IM&S) buying channels and streamline end-to-end procurement processes while improving overall user experience.
Too many systems, not enough central control
IFF’s growth-through-acquisition strategy resulted in decentralized procurement operations. Different systems created confusion, frustration, and “maverick buying”—purchases occurring outside negotiated contracts simply because it was easier. On occasion, the company paid different prices for the same item across different business units. As IFF sought to standardize its procurement platform for 110+ manufacturing facilities and 100 R&D centers in 65 countries, it invested in an integrated, AI-enabled procurement platform as the hub of its effort.
Deepening the channel and scaling value
KPMG launched an extensive buying-channel assessment, examining how procurement decisions were made across regions, business units, and spend categories. The teams analyzed Materials Resource Planning (MRP) vs. non-MRP spend, uncovered regional discrepancies, evaluated Accounts Payable pain points, and captured detailed insights that revealed significant inefficiencies—along with substantial opportunities for value capture.
The channel assessment identified more than 20 initiatives to drive savings. With solid data behind its proposals, KPMG demonstrated that the platform transformation would “self-fund”—the savings from efficiency gains would more than offset the cost of implementation. Within six months, KPMG’s strategic sourcing value had paid for the entire implementation and produced an additional $35 million in savings.
In the project’s initial phases, KPMG integrated approximately a dozen systems. The lessons learned have helped increase efficiency as deployment continues across additional sites, business units, multiple ERP instances, and the related middleware needed to synchronize the various systems.
