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Leveraging scale and centralizing procurement with Keelvar
Facing the challenge of complex, legacy sourcing tools that required extensive manual effort, ExxonMobil sought a solution that would support their ambitious transformation goals. They aimed to streamline operations, achieve significant cost savings, and improve overall procurement efficiency.
We wanted to do something that was a risk and something that we didn't do before to leverage our scale. And we couldn't really do that without the right tools.”
- Procurement Project Manager
The Challenge
Initially, the company relied on Coupa Sourcing Optimization (CSO) and Excel to manage large procurement events involving approximately 20,000 line items. This approach demanded high manual effort and lacked the flexibility to analyze different award scenarios effectively. Managing a complex logistics network with 1,000 lanes and a substantial budget through Excel also posed significant challenges.
The existing tools were difficult to use, required outsourced consultants, and could not provide real-time feedback for bidders, making it challenging for suppliers to be expressive and drive win-win outcomes. ExxonMobil needed a tool that offered usability, scalability, flexibility, and better management of complexity.
The Solution
Mid-way through a large procurement tender, the company decided to switch from Coupa CSO to Keelvar Sourcing Optimizer. Keelvar’s user-friendly interface and ability to handle complex bids and consolidate large volumes of data efficiently made it the ideal choice. The switch allowed the ExxonMobil to restart the event and address the challenges they faced with their existing tools.
Keelvar was introduced into their procurement process, enabling the company to move from static, historical bidding processes to a dynamic, scenario-based approach. This shift empowered suppliers to be more expressive, leading to win-win outcomes. It also dramatically improved their ability to make more data-driven decisions by analyzing multiple scenarios with complex criteria and bid data in a minutes.
Implementation
The RFP covered thousands of items across various categories, seeking alternate supplier proposals and effectively evaluating a large volume of items across numerous suppliers in North America. The adoption of Keelvar was swift and effective, with the company importing a bid sheet with a significant amount of data from Coupa in just a few hours.
ExxonMobil refined their strategy by eliminating less significant items and focusing on those with greater volume. They combined bids from different divisions, simplifying the process and leveraging scale for better pricing. Keelvar’s real-time dynamic bidder feedback provided clear supplier communication, encouraging competitive pricing and dynamic bid adjustments.
“This was a very large, complex bid, which was great to leverage Keelvar for.”
- Procurement Project Manager
The transition went very smoothly and the shift in sourcing tool was instrumental in enabling them to to quickly evaluate numerous bidding strategies at a very complex and granular level, significantly enhancing the project team’s decision-making capabilities.
Benefits
ExxonMobil saw significant reductions in time spent on correcting bids, allowing the team to focus more on strategic analysis and negotiating better deals. Keelvar’s flexible analysis features enabled real-time feedback and comprehensive bid evaluations, allowing suppliers to differentiate themselves beyond just price.
“We started off wanting to buy across North America, across seven categories. It’s like 14 bids in one because we used to bid by region, by area, and by category. Now we're just doing all of North America and all categories in one.That is the biggest thing that Keelvar is helping us with.”
- Procurement Project Manager
For suppliers, Keelvar offered the opportunity to fully express their capabilities. The platform's flexible analysis features allowed the company to provide real-time feedback and evaluate bids considering multiple components and criteria, meaning that suppliers could differentiate themselves beyond just price.
Results
- Cost Savings: Savings of approximately 8-16% from a total spend of $600 million.
- Additional Savings: An additional 5% cost savings from the use of alternates.
- Bid Consolidation: Consolidation of many bids into a single event across North America.
- Scenario Execution: Ability to run multiple scenarios and analyze bids at a granular level with 583 successful scenarios executed despite limited formal training on Keelvar.
- Spend Consolidation: Spend consolidation to negotiate volume or tiered discounts, driving additional savings.
- Enhanced Engagement: Enhanced supplier engagement and competitive bidding through real-time, dynamic feedback mechanisms (traffic-light system).
- Operational Efficiency: Reduction in operational complexities with a more straightforward, transparent, and effective procurement process.
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