Deloitte Consulting helps Lenovo with global procurement transformation

10 July 2017

Lenovo has successfully completed a major revamp of the technology backbone of its global procurement function. The transformation to SAP Ariba, dubbed one of the most complex to date globally by the software provider, was supported by an international team of management and technology consultants from Deloitte Consulting. 

With revenues of $46 billion, Chinese multinational Lenovo is one of the globe’s leaders in providing innovative consumer, commercial and enterprise technologies. Its portfolio of products and services covers PCs, workstations, servers, storage, smart TVs and a family of mobile products such as smartphones (Lenovo and Motorola brands), tablets and apps.

Like most large organisations, Lenovo ever year sources million in products and services to provide materials for its manufacturing operations and keep its business running. In a bid to optimise its procurement function, as well as realise savings across its cost and supply base, Lenovo’s management team recently decided to launch a massive overhaul programme. 

Following a solution selection process, Lenovo opted to replace its legacy infrastructure, which ran for a large part on an ERP from SAP, with the cloud-based SAP Ariba Procurement Platform, a suite that facilitates the full Source-to-Pay function. A competitive tender subsequently was launched to find the right consulting partner, and after rounds of comparison, Lenovo was impressed by Deloitte’s expertise in digital supply chain consulting service and SAP Ariba implementation, tapping the Big Four as its strategic partner to officially initiate the project. 

Lenovo has successfully completed a major revamp of its global procurement function

The scope of the programme was immense – over 22,000 users from various Lenovo businesses in 73 countries would be affected by the transition. Among the departments that were impacted are Procurement, Administration, Marketing, Supply Chain, Research & Development, Human Resources, Finance, Tax and Legal. 

The project’s complexity, tight schedule and global cooperation needs urged Deloitte to organise a cross-border team in Beijing (where Lenovo is headquartered), including Deloitte China at core and teams from Deloitte US and India.

Following six months of hard work, the first phase of the programme – the upstream project (Sourcing, Contract Management, Supplier Information Management and Supplier Performance Management) successfully went live in 73 countries on 9 January 2017. One month later, the downstream project (Source-to-pay modules) also went live in 7 countries and 2 China-based factories on 13 February 2017.

The new solution has, according to Sophie Zhu, Procurement Director at Lenovo, brought rise to several benefits. SAP Ariba enables Lenovo to streamline and harmonise procurement processes for various regions and commodity catalogues, down the line ensuring better data visbility and integration between procurement processes, supporting improved management of its E2E procurement operation. The cloud-based solution is faster and more user friendly for its stakeholders, improving job efficiency and satisfaction of staff, as well as other stakeholders such as vendor and third party companies.

“We needed a standard way to manage procurement that would allow us to not only manage our costs, but minimise risks, and an integrated system to drive it. Working with SAP Ariba and Deloitte, we proposed new functional requirements and developed a financial management solution that could accommodate our unique needs. And they delivered.”

Lenovo’s project was one of the most complex SAP Ariba transition across the world

With the transition to SAP Ariba, Lenovo joins more than 2.5 million companies in 190 countries around the world who are connected to the network, using it to transact over $1 trillion in commerce on an annual basis. “The world has gone digital and procurement has gone with it,” commented Gareth Bowen, Head of SAP Ariba for Greater China. “Organisations like Lenovo that are embracing the trend can power new ways of thinking and operating that beyond savings and efficiencies, create long-term, sustainable advantage for their business.” 

Bowen added that the programme was the the first successful SAP Ariba project in China with a global implementation, and what he describes as one of the “most complicated and difficult Cloud-based Ariba projects” across the world in recent years. 

For Lenovo, the IT implementation marks a first step in a wider strategic sourcing and procurement transformation roadmap. In delivering on the strategy, the company is likely to continue its collaboration with Deloitte, according to Li Wei, a Vice President at Lenovo. “Deloitte’s expertise and dedication are one of the key factors of the project’s success. This lays a solid foundation for our further collaboration in the future.” 

Lai Youyou, a SAP Consulting Partner at Deloitte China, also remarked on the success of the project, “We have been able to help Lenovo drive a more transparent and collaborative negotiation process that has opened the door to savings, efficiencies and innovation.”


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How data insights helped Network Rail improve the South-East route

11 April 2019

Amey Consulting has leveraged data insights to assist Network Rail with the improvement of its South-Eastern route. Using the Quartz tool, which monitors train movement, Network Rail will now be able to commit to data-enabled interventions to quickly improve underperforming train stations.

With rail services in the UK coming under strain from the demands of modern commuter life, while the infrastructure and service delivery of the nation’s railways has come in for sustained criticism in recent years, a period of regeneration is on the cards at last. Network Rail is the owner and infrastructure manager of most of the railway network in Great Britain, and has subsequently tapped the consulting industry on a regular basis to help find areas of improvement.

The group recently drafted in consultancy BearingPoint to conduct a thorough organisational evaluation and advise Network Rail (High Speed) on attaining a ‘fit for purpose’ organisational standard – for which the consultancy was nominated at the 2019 MCA Awards. Meanwhile, ArupArcadis and Aecom have been contracted to help Colas Rail and Babcock Rail implement a decade-long framework for Network Rail, aimed at supporting the delivery of the next generation of rail systems, with the contracts said to be worth as much as £5 billion

How data insights helped Network Rail improve the South-East route

As Network Rail further aims to improve its performance and customer service offering, another area it has sought help from the consulting sector for is its South-East route. The network of railways connects London with the southern parts of the country, as well as with Europe, making it the busiest in the country, with more than 500 million passenger journeys per year. This crucial expanse of rail was plagued with small minute delays, which were impacting millions of passengers every day, while reducing the efficiency and capacity of the overall network – something Amey Consulting was selected to help solve.

Amey Consulting soon determined that with the sub-threshold delays to services only lasting for 1 or 2 minutes, most were not the subject of detailed root cause analysis, and this made their corrections almost impossible – with dire consequences. Without addressing these delays, passenger satisfaction would fall, while the capacity and efficiency of the network would be reduced, stinging the income of Network Rail even before a host of delay-related fines would hit the company.

In order to help the client gain a better understanding of where, how, when and what these small delays occur, Amey Consulting looked to demonstrate the value of data-led consulting, with a significant reduction in delays within the first month of rolling out changes to key stations. The consultants embedded themselves in Network Rail’s team, helping them learn the key skills needed to support and apply data-driven solutions.

Agile transport

This involved the deployment of the Quartz tool. The system utilises to-the-second train movement data to present the performance of individual stations across the South-East route. It allows users to effortlessly understand station performance with a high level of detail, and use this information to identify losses caused by small-minute delays. The granular data allows for targeted actions to drive efficiency savings and performance improvements. More importantly, it allows users to understand the impact of small process changes on performance. 

Steve Dyke, an Executive Partner at Amey Consulting, said of the project, “We looked to identify the physical root cause on the infrastructure, building a case for change then managing that project implementation and tracking the benefit/value.  In doing so we are working to define a data performance improvement service to the operational and infrastructure owners.”

Just as important for the project as the technology, however, was teaching the Network Rail team how to leverage it after the consultants were gone. The Amey Consulting team worked to develop an agile working culture within Network Rail’s South-East division, helping staff to be confident in using data to improve the journeys of millions of people per year by attacking the problem from the ground up.

Dyke concluded, “This is less about the tools and about the approach to managing performance.  It meant using by-the-second analysis, data science, and then agile development to visualise and identify areas where improvements can be made.  We then worked with NR to change the way they approached the management of the infrastructure changes.  So rather than pass the information down the value chain, any of which could have been missed, we managed the change end-to-end.”

The project was so successful that Amey Consulting was also among those honoured at the recent MCA Awards. The firm scooped the Performance Improvement in the Public Sector prize for its work with Network Rail, at the 2019 ceremony in London.