Strategic Sourcing and Procurement Excellence

Many companies across sectors implement the Procurement Transformation project to remain competitive in today's complex business environment. A typical Procurement Transformation project touches upon comprehensive aspects of the Procurement function, including the service delivery model, organization structure, people, business processes, governance, data & reporting, and technology. The business objectives of a Procurement Transformation project can be varied from redefining the strategic role of the Procurement function and unlocking their potential contribution to the business goal, strengthening the supply chain resilience, driving cost efficiency and preventing cost leakage, enhancing productivity, and balancing risks with necessary controls.
The common situations that trigger the need for a Procurement Transformation project:

• Large companies with multiple BUs or branches need to review their Procurement service delivery model and define the optimal centralized level to boost efficiency.

• Companies with mere transactional Procurement want to shift their focus to more strategic Procurement in Strategic Sourcing, Category Management, Supplier Management, and Contract Management.

• Companies with a complicated legacy of Procurement function want to streamline and modernize their operations and support business growth.

• Companies that want to transform their Supply Chain and Operations to align with changes in business model and Procurement is one of the significant parts of the journey.

To ensure the success of a Procurement Transformation project, we deploy a robust approach from a rapid assessment using the KPMG framework and spend analytics tool to identify gaps and areas for improvement, sketch out a customized roadmap, and design and implement solutions. The journey will include intensive training and hand-holding works to uplift the capabilities and competencies of clients' workforce to weave the changes into their daily practice.
In KPMG Vietnam, our Procurement team has intensive experience in Procurement Transformation projects across sectors such as manufacturing, FMCG, banking, and others. With the combination of sector understanding, Procurement expertise, powerful tools, and robust methodology, we are confident to be the right partner for our clients on their Procurement Transformation journey.

Procurement expenses typically comprise a significant portion of a company’s overall expenditure. It can vary across sectors, but Procurement expenses generally account for 50% - 70% of a company’s total spending. Therefore, optimizing procurement expenses is crucial for companies to protect their profit margin.

At KPMG in Vietnam, with intensive experience in Strategic Sourcing and Procurement Excellence, we are helping clients across the sectors to optimize the Total Cost Ownership of direct material cost significantly (approx. 4% - 9%) and indirect cost (approx. 10% - 17%). The tangible benefits come from our deep understanding of category management and market trends for Strategic Sourcing, advanced Procurement Excellence techniques, robust commercial terms, Contract Management, and other techniques in leveraging Optimization algorithms.

Typically, we will help clients to review their annual spending and conduct spend analytics to identify optimization initiatives. Each cost-saving initiative will be delivered by a blended team of KPMG and the client’s Procurement team. We also take the chance to transfer our knowledge and skills to them and ensure they can carry on continuous improvement in the future with more cost savings.

Nowadays, the Procurement function continuously evolves from a tactical to a strategic role in the enterprise model, CPOs and other senior procurement leaders are pushing for their teams' strategic contribution to the business's success. Category Strategic Sourcing and Management, as Strategic Procurement's core pillar, has become a focused area for many companies.

In KPMG Vietnam, with intensive experience and deep knowledge across multiple categories in direct materials, packaging, MRO, and indirect spending (e.g., IT, facility management, services, etc.) we can help companies to analyze their categories from the internal business perspective and external market trends, develop robust sourcing strategies and deploy to realize tangible benefits.

While working with us, the Procurement team from the client side can also learn advanced techniques in category analytics, should cost model development, specification reassessment, and others.

Selecting the right suppliers and managing the full life cycle effectively is crucial for any company to realize strategic contributions from its partners.
At KPMG in Vietnam, we offer our clients Supplier Development services in which our Procurement experts can support the Supplier Management:

• Develop a quality supplier base and align the company’s business objectives with the supplier base.

• Monitor supplier risks, mitigate and reduce supply risks to ensure operational stability.

• Monitor and improve supplier performance from multiple aspects such as service level agreement, lead time, process robustness, quality and lean effectiveness.

Nowadays, besides the P2P (Procure to Pay) platform, companies understand that advanced Strategic Procurement Technology will help them to unlock significant strategic value. However, selecting the right solution and implementing it successfully takes work. Most implementations failed because they have been defined as technology-driven projects, not business-driven ones. At KPMG in Vietnam, with our deep understanding of Strategic Procurement in Strategic Sourcing, Supplier Management, Contract Management, and Spend Analytics, we can support clients in evaluating solutions, selecting the right choice, and implementing them successfully.

Sustainable Procurement Practice is becoming increasingly important as companies recognize their procurement decisions' impact on the environment and society. Therefore, they seek a robust approach to establish Sustainable Procurement Practices to align and balance the sustainability goals and the business objectives.
At KPMG in Vietnam, we combine our Procurement expertise with our strong foundation in ESG areas (Environment, Social, and Governance) to offer clients the Sustainable Procurement Practice establishment service to assist clients:

• Assess the current state of procurement practices and identify areas where improvements can be made for a more sustainable practice.

• Set clear sustainability goals and targets for procurement. This could include reducing carbon emissions, minimizing waste, or promoting social equity in the supply chain.

• Develop a plan to engage suppliers to promote sustainability throughout the supply chain. This can be done through training, collaboration, and incentivizing sustainable practices.

• Measure and report on sustainability performance to track progress and identify areas for improvement.

Explore our 360º Supplier Assessment in Sustainable Procurement here: 360º Supplier Assessment Brochure (169 KB) ⤓