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Spotlight on Procurement and NCPO

Procurement spend represents about 50% of the revenue across Nordic Capital’s portfolio companies. As such, procurement excellence is regarded as a key value lever that delivers a sustainable competitive advantage, act as a catalyst for innovation and fuel future growth.

NCPO improves the procurement performance

The Nordic Capital Procurement Optimisation programme, NCPO, was launched in 2009 to bring together procurement professionals across the portfolio and ensure that procurement value creation is maximised. NCPO works along four key pillars:

  1. Community: active management of a community of over 200 procurement professionals to share best practice and harvest innovation.
  2. NCPO Academy: ensure the development of procurement talent through our in-house procurement academy. Equally, support the recruitment of key talent
  3. Cross-portfolio sourcing: leverage cross-portfolio spend to put in place framework agreements with partner suppliers
  4. Strategy & company-specific programmes: works with our businesses and partners to develop strategies, design and roll-out individual programmes, from large Capex projects to full-scale procurement transformations.

The Nordic Capital Approach – Procurement Excellence framework

NCPO developed a procurement excellence framework for portfolio companies to assess the current state, set future ambitions and measure ongoing performance. The framework focuses on eight dimensions covering all aspects of the operating model, as well as the key enablers required for an effective operation:

  1. Procurement strategy
  2. Spend mapping and supplier segmentation
  3. Procurement value proposition and executive sponsorship
  4. Key procurement levers to optimise performance
  5. Leveraging NC scale and NCPO agreements
  6. Procurement processes, digitalisation and technology
  7. Performance reporting to drive the procurement agenda
  8. Procurement organisation, leadership competencies and capabilities

No two Nordic Capital portfolio companies are the same; hence, the framework allows senior management to set the targets relative to their current maturity and create plan of action. NCPO works alongside the portfolio companies supporting the process throughout the ownership period.

Procurement Excellence in Action

NCPO has worked with many portfolio businesses to improve their procurement performance, from developing capabilities to delivering full-scale transformations.

At Clario (formerly ERT), a global company providing e-clinical solutions for the pharmaceutical industry company, the journey began with the on-boarding of a CPO to build the right procurement capability and support the company’s strategic objectives. Considerable value was delivered at an early stage in the process by leveraging NCPO agreements across various high-spend areas resulting in savings, higher quality goods and reduced supply chain risks.

Following the ERT merger with Bioclinica, a comprehensive procurement programme was launched to identify and deliver synergies. With procurement capability in place, cross-functional teams were set-up to facilitate decision making, align requirements and drive procurement activity forward. The programme is on track to exceeding the defined targets and providing the organisation with a competitive advantage.

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