GlaxoSmithKline chief Andrew Witty sees the supply chain and procurement functions as his next targets for cost savings. "We continue to apply sustained pressure to GSK's cost base to realize further savings," he said, in Procurement Leaders.
One tactic is a dedicated head of indirect procurement, who will oversee the company's $1.63 billion in spending. Chief financial officer Simon Dingemans said he deliberately went to consumer companies to look for someone who will drive the function differently than GSK has in the past.
Dingemans also thinks he may have struck gold in corporate software. "We have around 4,500 software applications in the catalog," he said in the article. By standardizing software platforms--an effort already underway--he hopes to cut back to "those which have real and tangible benefits."
GSK isn't the only Big Pharma to take a hard look at the procurement function. Novartis's head of productivity strategy, Sammy Rashed, says procurement pros need to break out of the box they've built around themselves via the systematic delivery of cost savings. He seeks a larger contribution from the procurement function, transforming it from a bottom-line driver to an operating income generator.
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