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Fostering High Performance at Panalpinathrough Centralized Sourcing

Panalpina is one of the world’s leading

providers of forwarding and logistics services,

specializing in intercontinental air and ocean

freight shipments and associated supply chain

management solutions. The company employs

approximately 13,500 people worldwide and

generated revenues of about US $8.5 billion in2008.

Summary

As part of a strategic initiative to reduce costs,

Panalpina sought to develop a centralized

sourcing capability that would enable it to

achieve economies of scale, increase visibility

into spending, augment its negotiation strengthand facilitate enterprise-wide adoption of best

practices.

Panalpina chose to team with Accenture on this

 journey for several reasons. The most significant

was the fact that the Accenture team included

professionals with deep category experience

managing and optimizing procurement for those

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categories most relevant to Panalpina.

In addition, Accenture brought to the

project existing contracts with global

suppliers that could be leveraged to

generate savings for Panalpina quickly,

as well as an innovative value-based

deal structure that meant no upfront

investment was required for the

company, thus substantially minimizingrisk. While the project is still underway,

within two months, cost savings of 22

percent were realized on office supplies

and IT hardware alone.

Business challenge

Panalpina was seeking to improve its

cost structure by creating a globally

integrated sourcing capability for

indirect procurement. In pursuit of 

fast results, the company designated

office supplies, IT hardware,

telecommunication services and

temporary labor as the highest priorities.

How Accenture helped

• AppliedAccenture’sprovenseven-

step sourcing methodology, which

encompasses:

- Collecting spending data from

across the organization,

- Integrating it into one unified

record,

- Defining required specifications

for items being sourced,

- Identifying and approaching

suppliers,

- Soliciting and receiving quotes,

- Negotiating optimal pricing and

service levels, and

- Setting up a new procurement

platform enabling employeeself-service.

This entire process was compressed

into less than four months per

category.

• LeveragedAccenture’sexisting

contracts with its own suppliers to

negotiate more favorable pricing for

Panalpina at an accelerated pace.

• Workedtomaximizeemployee

compliance with the new procure-

ment contracts by:

- Enlisting C-level support,

- Rolling out a change management

program that quickly resolved

any issues with new procurement

processes,

- Ensuring that preferred suppliersconsistently provided high levels of 

service and value, and

- Auditing supplier invoices to

confirm only preferred vendors

were being used.

• Useda100percentgain-share,“pay

as you save” project structure that

eliminated Panalpina’s up-front costs

and minimized risk for the logistic

service provider.

High performance delivered

• Deliveredglobalsavingsof22

percent in the procurement of office

products, IT hardware (within two

months) and telecommunication

services (within five months), exceed-

ing the original estimate of 15 to 18

percent.

• Generatedaninitialquickcost

savings of US $300,000 in telecom-

munications spent by negotiatingdiscounts from Panalpina’s existing

telecommunications service suppliers.

• Createdaglobalstrategicsourcing

capability that helps forge effective

links with suppliers – one of the

key characteristic of supply chain

mastery per Accenture’s ongoing High

Performance Business research.

Assets

• Accenture’sseven-stepproprietary

sourcing methodology

• Accenture’sglobalnetworkofsuppli-

ers of key goods and services

• Accenture’sglobalnetworkofcat-

egory experts for targeted categories

• 100percentgain-shareproject

structure that eliminates up-front

costs for the client

Copyright © 2010 Accenture

All rights reserved.

Accenture, its logo, and

High Performance Delivered

are trademarks of Accenture.

About Accenture

Accenture is a global management

consulting, technology services and

outsourcing company, with more than176,000 people serving clients in

more than 120 countries. Combining

unparalleled experience, comprehensive

capabilities across all industries and

business functions, and extensive

research on the world’s most successful

companies, Accenture collaborates

with clients to help them become

high-performance businesses and

governments. The company generated

net revenues of US$21.58 billion for

the fiscal year ended Aug. 31, 2009.Its home page is www.accenture.com.

“Accenture brought a

high level of innovation

and value to this

project, from the

way they structured

our contract, to their

sourcing methodology,

to the process they

used to help us manage

the change... So far, the

results have exceeded

our expectations.”

— Marco Gadola,

CFO,Panalpina