Holman Enterprises – Transforming Large-Scale Operations with Predictive Procurement
Advances in artificial intelligence (AI), machine learning, and big data have led to breakthrough capabilities for procurement software. As the authors of Harvard Business Review’s “AI Can Help Companies Tap New Sources of Data for Analytics” point out:
“AI and traditional analytics are being combined to make data analysis easier and more effective … They promise to offer more and better insights to more people within organizations more quickly.”
Arkestro delivers on that promise.
Holman Enterprises is an international automotive distribution and manufacturing company. In a project that transformed their procurement operations, Holman turned to Arkestro. Interested in analytics, forecasting, and predictive procurement capabilities, Holman was looking for a solution to bumpy procurement operations.
Procurement and Large-Scale Operational Objectives
The global pandemic proved to be the catalyst for Holman Enterprises’ procurement team to make a big change.
The pandemic caused market disruption, including shrinking labor forces and a change in consumer behaviors. There were supply chain disruptions as well. Making the situation more difficult, the company’s procurement operations were decentralized, reflecting its international operations. This resulted in purchasing being an ad hoc process. Budget forecasting was based on suppliers’ assumed costs, which made projections inaccurate. The company’s procurement team could not forecast trends with any accuracy, which ruled it out in terms of contributing to strategic business decisions. In responding to the pandemic-driven conditions, Holman needed to be strategic—but inefficient and disconnected systems and processes hobbled its procurement team.
Something had to change, and quickly.
The Holman Enterprises procurement team identified three key objectives that would transform their sourcing capability:
- Break down the operational silos across different sourcing and procurement locations to centralize data, processes, and decisions.
- Identify strategic partners to support business objectives, streamline purchasing, and minimize the use of ad hoc contracts.
- Be capable of intelligently and accurately forecasting budgets, using real-time comparative cost and availability data.
Three objectives make it sound like a simple project, but achieving those objectives required a radical change in how Holman’s procurement team operated. To make it possible, the company also knew it would need to adopt cutting-edge procurement software.
Streamlining operations achieved Holman’s goals and saved money
Streamlining procurement operations was crucial to achieving Holman’s goals. This included both centralizing the procurement function and narrowing down the supplier base to include only those that offer strategic value to the company.
The combination addressed the issue of ad hoc contracts. Centralization of procurement ensured everyone involved in the sourcing process was following the same playbook. Centralization and consolidation of suppliers also offered more competitive pricing, bulk discount opportunities, and preferential service levels. Data was updated in real-time and centrally stored, bringing a new level of transparency to sourcing.
Frank Battino is the Director of Procurement & Logistics Services at Holman Enterprises. He sums up the wins for his company as a result of streamlining their procurement operations:
“We no longer face the communication breakdowns and delays that were happening when our sourcing and procurement locations were siloed. Arkestro has helped us streamline the purchasing and bidding process, improving the quality of our supplier network and eliminating the need for ad hoc contracts.”
Regularly updated data combined with the AI-powered analytics capabilities of Arkestro proved to be another big win for the company. Arkestro provided Holman’s sourcing professionals with the flexibility to address supply chain and market fluctuations in real-time. They are also able to accurately forecast trends such as costs, lead times, and delivery schedules, that could prove crucial to making informed business decisions. They can predict whether key components or services are likely to be more or less expensive in the near future. In addition, budgets can be forecast using true comparative costs and availability for pinpoint accuracy.
The company was transformed by moving to a predictive procurement model that supported strategic planning. It made the company stronger, made their customers happier, and saved money.
Now that the company has adopted Arkestro, its procurement team has become highly efficient and effective. Frank Battino describes one of the crucial ways that Arkestro has improved his team’s operations:
“One of the challenges that we’ve had in categorizing our spend is taking on static, preferred supplier agreements to drive pricing down. Arkestro empowers us to automate and accelerate the bidding process, speeding delivery of preferred supplier agreements to different businesses.”
Holman Enterprises has been able to put some numbers to the Arkestro transformation, and they are very impressive. Being able to accurately forecast pricing shaved 7% off a $500k+ stream of spend on the very first day of the system being live. The company was able to reduce its portfolio from over 40 contracted suppliers to five strategic partners. In addition, during the first bid cycle alone, streamlined procurement cycle times, dramatically reduced process bottlenecks, centralization of operations, and predictive pricing suggestions saved over $202k.
Arkestro also helped Holman accelerate the delivery of higher-quality products and services to customers worldwide.
This is a prime, real-world example of how Arkestro can leverage AI and data to provide game-changing analytics and other advanced capabilities that will fundamentally transform how a procurement team operates.
Take the Next Step
To learn more about how predictive procurement transformed the sourcing operations of Holman Enterprises get a demo of the predictive procurement platform that cut Holman’s spend by 7% while reducing its portfolio of contracted suppliers to five strategic partners. You’ll also see powerful features like instant forecasts, real-time collaboration, and AI-powered autonomous tactical buying.