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High-Definition Sourcing: Going Beyond Traditional Sourcing

4/22/2011

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When It’s Time to Seek New Opportunities »Marketplace not responsive to leverage-based

approach»Category already sourced effectively and in control»Problem confounded with other issues

» Spend currently in house» Limited marketplace options» Traditional barriers to change

»Obvious problems with upstream decision-making»Need to change what is being bought

» Demand management» SKU rationalization» Alternate specifications

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High-Def Sourcing: When the Market’s in Control

»The Customer: Consumer Packaged Goods Company »The Situation

» ~$160 MM » Tight market conditions» Periodic one-on-one direct negotiation

»High-Definition Sourcing Approach: » Collect expressive proposals that drive consideration of historically

overlooked opportunities» Allow savings even when prices are increasing for business-as-usual» Scenario generation allows for consensus building with suppliers

»Result: » Over 25% savings

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High-Def Sourcing: When Everything’s Good

»The Customer: Global Leader in Tobacco»The Situation:

» $10 M Pilot to reduce packaging costs » Strong supply base » Order management outside of procurement responsibility

»High-Definition Sourcing Approach: » Formula-based approach to RFPs» Detailed spend analysis» Accelerate re-cost calculations under various order

policy/demand aggregation scenarios

»Result:» Uncovered an additional 25% reduction in costs

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High-Def Sourcing: When the Problem Isn’t Cost

»The Customer: Worldwide leader in pharmaceuticals »The Situation:

» Need for highly specialized service varies dramatically year to year

» Team didn’t believe sourcing could solve the problem

»High-Definition Sourcing Approach: » Integrated intangibles such as therapeutic expertise,

qualification and experience into analysis

»Result:» Good or better supply choices for less money

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»For more information on BravoSolution’s high-definition sourcing and spend analysis solutions, visit BravoSolution.com.