From fragmented purchasing to full spend visibility: $42M in unmanaged spend thanks to procurement advisory

Project overview

About the client

A diversified food manufacturing group spanning meat production, dairy processing, and related food categories, operating through five separate legal entities with combined annual procurement spend of approximately $186.5 million.

Challenge

Each entity managed procurement independently, with no shared standards, centralized governance, or consolidated view of group-wide spend. Before recommending any organizational change, the leadership team needed a clear picture of how procurement was actually operating across the group.

This led to several issues:

• $42 million — approximately 22% of total procurement spend was purchased directly by operating departments without procurement involvement, including a $12 million marketing and advertising budget
  
• 53 people across the group had purchasing authority, but only 39 were dedicated buyers; the remaining employees split procurement responsibilities with unrelated roles
  
• Supply teams across the five entities operated autonomously, with limited coordination on shared categories, suppliers, or purchasing strategies
  
• The group’s ROSMA (Return on Spend Management Activity) stood at just 5.9, indicating that procurement was generating limited return relative to its cost
  
• The procurement function operated on an annual budget of only $230,000, significantly below what would be expected for a group of this scale

Our procurement consulting approach

We consolidated procurement data across all five legal entities, analyzed spend by category and entity, identified the fastest opportunities for value capture, and designed a phased governance model rather than recommending an immediate group-wide restructuring.

Spend consolidation

Combined transaction data across all five entities to create a single, group-wide view of approximately $186.5 million in annual procurement spend.

Category segmentation

Identified 8 categories with the strongest potential for consolidation, including spare parts, IT and office equipment, construction materials, energy, and others.

Together, these categories represented approximately $10.5 million in spend and became the first-wave priorities for centralized procurement.

ROSMA benchmarking

Established a baseline ROSMA of 5.9 and modeled a path toward 43.1 with a properly structured and resourced procurement function.

Target operating model

Designed a dual-control governance model, combining a group-level Director of Procurement with plant-level leadership oversight. This created centralized standards and category governance while preserving the local responsiveness required by individual operations.

Organization design

Designed a 37-person procurement organization, divided between:

• 10 strategic sourcing roles
• 27 operational procurement roles

The structure also introduced dedicated category management and procurement administration capabilities.

Staged rollout

Recommended starting with the 8 priority categories where centralization offered the clearest savings opportunity and lowest implementation risk, followed by a phased expansion into additional categories.

Deliverables

• Procurement advisory services
• Consolidated procurement spend visibility across 5 legal entities
• Category segmentation and first-wave centralization priorities
• ROSMA benchmark and 2-year target
• Dual-control procurement operating model
• 37-person target organization structure
• Staged procurement transformation roadmap

Results

$12.5 million in identified annual savings potential

Equivalent to approximately 5.1% of total procurement spend, quantified using the group’s consolidated purchasing data.

ROSMA projected to increase from 5.9 to 43.1

Within the second year of the transformation program — representing more than a 7x improvement in procurement’s return on investment.

$10.5 million in first-wave centralized spend

Across 8 priority categories selected for their combination of savings potential, ease of consolidation, and implementation risk.

A right-sized procurement organization

Replaced an informal structure in which 53 people held purchasing responsibilities with a structured 37-person procurement function, clearly separating strategic sourcing from operational buying.

One group-wide spend view

Replaced five disconnected, entity-level procurement views with a consolidated picture of group-wide spending, suppliers, and category opportunities.

Business impact

The assessment gave leadership visibility into how much spend was happening outside procurement’s control — and, more importantly, what that fragmented model was costing the business.

The identified $12.5 million in annual savings potential created a clear business case for investing in procurement capabilities, governance, and talent.

Rather than attempting a disruptive group-wide centralization, the transformation was designed around a category-led approach: start with the highest-value, lowest-risk opportunities, demonstrate measurable savings, and use those results to build momentum for broader procurement centralization.

This approach allowed the group to move from fragmented, entity-level purchasing toward a scalable procurement operating model with centralized governance, stronger category expertise, and measurable financial impact.