An operational efficiency success story

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PwC delivered its professional services to a primary Italian multi-utility group with the objective of enhancing its purchasing model efficiency and reducing the related costs. The group, owned by one of the main Italian municipalities, is responsible for the area’s waste cycle management: collection, treatment, disposal and sorting-recycling.

Called to face the growth of its financial debt, the group finally resolved to undertake a cost reduction program. PwC supported the group in recovering efficiency from the purchasing process, particularly:

  • improving the purchasing governancec
  • reducing fragmentation of procurement responsibilities
  • standardising price policies used by different business units when purchasing the same service
  • simplifying purchasing procedures
  • enhancing the information technology system supporting the procurement activities
  • increasing the percentage of purchases obtained through public tenders

PwC supported the client in designing a new centralized purchasing model. PwC first dedicated its skilled professional resources in re-engineering the group’s purchasing process and organization and succeeded in creating a Central Unit for Purchases (CUP). PwC team also focused on defining new rules and procedures to completely and efficiently regulate the new purchasing process.

In addition, PwC supported the client in renegotiating certain centralised purchasing contracts and processes for competitive auctions, based on innovative purchasing approaches. Results were considerable: annual savings of approximately €15 million (amounting to around 19% of total expenses) and cumulated savings of over €160 million.