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Unlock Savings & Maximize Impact
Value Creation in Procurement
Imagine systematically unlocking untapped value within your procurement operations – sustainably and with measurable results. In the face of recurring cost pressures, many organizations strive for P&L-relevant savings, yet often fall short of realizing their full potential. valantic helps you close this gap with a structured, impact-oriented value creation approach.
From identifying hidden opportunities and implementing prioritized savings initiatives to developing innovative value strategies, we enable organizations to boost cost efficiency, elevate supplier performance, and strengthen risk management.
How Do We Unlock Value Creation?
- Identify hidden savings potential across procurement operations
- Efficiently implement high-impact cost-reduction initiatives
- Leverage procurement to drive revenue and reduce risk
- Focus on demand management and optimizing supplier relationships
Ready to maximize value in your procurement operations? Contact us to transform your approach.
Opportunity Assessment
Quantified Potential for Maximum Impact
The starting point for value creation is a structured opportunity assessment. We evaluate the current situation using the following tools:
Spend Cube
Advanced analytics provide data-driven insights into purchasing volumes and specifications.
Interviews
Validate findings and gather qualitative input on procurement practices and preliminary savings ideas.
Contract Review
Analyze existing contractual constraints and incorporate all current terms and conditions into supplier comparisons.
Based on these inputs, savings opportunities are identified, quantified, and prioritized. valantic’s approach includes:
Lever Analysis
Assessment of 27 detailed levers and sub-levers (price, process cost, quantity) to reveal actionable potential.
Benchmarking
Compare internal and external data to determine savings potential by commodity group.
Action Plans
Develop tailored strategies that prioritize high-impact initiatives based on value and implementation complexity.
Examples of Price & Process Cost Levers
- Bundle Volume: Consolidate volumes across time and suppliers to enhance negotiation leverage.
- Optimize Specifications: Standardize or rationalize over-engineered specs while maintaining necessary quality.
- Expand Supplier Pool: Foster competitive tension through additional suppliers or tenders.
- Optimize Supply Chain: Improve logistics, utilize consignment stock, or explore nearshoring for better cost control.
Examples of Quantity Levers
- Tighten Demand Control: Use approval processes to avoid unnecessary purchases.
- Enforce Demand Policies: Establish clear procurement and consumption standards.
- Eliminate Demand: Identify and eliminate obsolete or non-essential needs.
- Adjust Economic Lifetime: Extend product life cycles to reduce reorder and maintenance costs.
Key Benefits
- Uncover comprehensive cost-saving opportunities
- Focus efforts on initiatives with highest return
- Create a clear roadmap for procurement optimization
By leveraging our opportunity assessment framework, organizations can confidently target areas that deliver measurable results.
Savings Realization
Structured Implementation for Measurable Results
To ensure savings are captured, valantic supports the structured implementation of initiatives through four proven pathways. Each path is selected based on time, resource availability, and desired transparency:
Immediate Implementation – low-effort, high-impact measures that can be implemented immediately. They require minimal coordination, no complex dependencies, and deliver visible improvements fast. Ideal for early-stage momentum, they demonstrate progress without delaying broader initiatives.
Implement initiatives like intensifying of guideline or elimination of dispensable materials or services to control procurement activities and improve efficiency with the help of quantity levers.
Quickly realize potential savings by renegotiating terms and conditions with existing suppliers by bundling volumes or optimizing specifications e.g., within annual supplier meetings. Use an external and internal negotiation script to transparently structure the renegotiations.
Conduct a comprehensive and professional tender by applying the strategic sourcing process with demand analysis, supply market analysis, commodity group strategy considering the identified levers, supplier analysis & selection and implementation to realize optimal results by utilizing competition.
Cooperatively examine potential savings opportunities for both, you and the respective supplier, by e.g., a joint supplier workshop. Use specific guidelines for this kind of collaboration, e.g., take on total cost of ownership perspective, ensure total cost transparency, use cross-functional teams from both parties and share respective savings.
Key Benefits
- Realize substantial and sustainable cost savings
- Improve supplier relationships and performance
- Optimize procurement processes through targeted execution
Our savings realization approach ensures that every initiative is executed effectively to achieve its full potential.
Implementation & Success Control
Securing P&L-Relevant Savings
Successful savings realization must be followed by structured implementation control to ensure long-term success. valantic provides:
Project Management
Continuously monitor and review achieved milestones and savings initiatives while intervene in case of risks (requirement for decisions, support or escalation). Discuss potential roadblocks (e.g., test capacities) and implement review gates to comprehensively steer procurement activities.
Savings Controlling
Use “savings degree” logic for consistent tracking of savings realization, regularly update corresponding savings & implementation progress and evaluate savings performance (deviation of forecasted and realized savings), which then can be reused within project management.
Key Benefit: Ensure savings are fully realized, sustainable, and reflected in the P&L.
By dedicated implementation and success control after savings realization, long-term procurement success is ensured.
Further Value Initiatives
Beyond Cost Savings
valantic’s value creation framework goes beyond cost reduction. We help organizations unlock broader strategic value through:
Revenue Generation
Identify opportunities to leverage procurement for new revenue streams – for example by engaging with suppliers regarding technological developments to enhance market differentiation and cooperating with key suppliers to develop innovative products, services or business models.
Risk Reduction
Mitigate supplier risks through proactive risk management, derivation of corresponding measures and closing of robust contracts by e.g., establishing advanced supplier evaluation & monitoring, reducing dependencies via diversification & nearshoring, and implementing robust contracting strategies with for instance long-term framework agreements.
Supply Security
Ensure consistent and reliable supply through strategic planning and supplier diversification – for example by developing strategic inventory & demand planning with optimized safety stock and forecasting, fostering long-term, trustworthy supplier relationships, and implementing multi-sourcing strategies with redundant capacities or suppliers where necessary and economically viable.
Key Benefits
- Generate revenue through innovation and collaboration
- Reduce risk exposure across the supplier base
- Increase supply chain resilience and reliability
These initiatives extend the value of procurement beyond traditional cost savings, delivering strategic advantages for your organization.
Value Creation as Part of the Bigger Procurement Picture
A structured value creation strategy is a key driver for unlocking the full potential of procurement. However, it does not stand alone – it operates within a broader procurement framework that integrates multiple strategic dimensions.
While value creation focuses on cost efficiency, supplier performance, and revenue generation, it must align seamlessly with other core procurement elements such as sustainability, digitalization, and procurement controlling.
At the core of this framework is Value Creation itself, supported by five critical dimensions:
By integrating these strategic dimensions, organizations can ensure that value creation initiatives drive sustainable, long-term benefits while maintaining alignment with overarching procurement objectives.
Target Operating Model (TOM)
Design and implementation of a future-proof procurement organization tailored to your business model. This involves the strategic alignment of procurement processes with business objectives to optimize efficiency and drive value creation. This includes adaptability to changing market conditions and technological advancements, ensuring long-term resilience and success.
Target Operating Model (TOM)
Strategy
Development of procurement strategies that are aligned with corporate goals and focused on value creation. This involves establishing clear category strategies and procurement objectives, ensuring that purchasing activities support broader business goals. Additionally, it includes a robust procurement KPI monitoring framework, which is aligned with controlling, to track and optimize performance across distinct categories and buyers while adapting to evolving market demands.
Strategy
Value Creation
Realization of cost savings and performance improvements through category-specific know-how and proven best practices for direct and indirect spend. Key enablers for savings include the analysis of price and process cost levers, as well as quantity levers. Success is driven by negotiation expertise, hands-on mentality, and strong market knowledge, ensuring effective engagement with suppliers and continuous optimization of procurement processes.
Value Creation
Data & Tools
Integration of advanced tools and analytics to optimize procurement activities and unlock the full value of your data. By leveraging innovative software and analytical capabilities, procurement teams can enhance their strategic decision-making, improve spend visibility, and streamline operations. This data-driven approach empowers organizations to identify opportunities for efficiency gains and foster continuous improvement in procurement practices.
Data & Tools
Procurement Suite
Implementation of scalable procurement platforms that fully leverage the potential of digital transformation. These platforms enable seamless integration of procurement functions, enhancing transparency and collaboration across the supply chain. By adopting procurement suites, organizations can automate workflows, increase process efficiency, and support strategic sourcing initiatives, ultimately driving value and innovation in procurement operations.
Procurement Suite
Sustainability
Strengthening ESG performance and building sustainable supply chains that meet regulatory and stakeholder expectations. By prioritizing environmentally friendly practices and ethical sourcing, organizations can reduce their carbon footprint and promote social responsibility. Implementing sustainability initiatives helps to mitigate risks, enhance brand reputation, and create long-term value while fostering transparency and accountability throughout the supply chain.
Sustainability
Artificial intelligence
The demands placed on modern procurement are constantly increasing: supply chains are becoming more complex, costs must be reduced, and processes must be made more efficient. AI in procurement offers companies completely new opportunities to identify potential savings, minimize risks, and make strategic decisions faster and on a more informed basis.
Artificial intelligenceThe Value Creation Framework
A Comprehensive Approach to Procurement Optimization
valantic’s value creation framework is structured around three interconnected pillars:
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1
Opportunity Assessment
Quantify savings and define actionable plans
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2
Savings Realization
Implement initiatives to unlock measurable results
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3
Further Value Initiatives
Go beyond savings to secure strategic advantages
This systematic cycle ensures procurement delivers lasting impact and remains closely aligned with your organization’s strategic priorities.
Maximizing Value Through Procurement
valantic’s value creation strategies empower organizations to unlock hidden potential, drive efficiency, and increase resilience. By focusing on savings, innovation, and risk mitigation, we position procurement as a value-creating engine at the heart of your business.
Ready to take your procurement to the next level? Get in touch!
Your Contact
Dr. Bernhard Höveler
Partner & Managing Director
valantic Supply Chain & Procurement Consulting