LVMH’s Le Bon Marché gains real-time visibility into procurement performance
- World’s first department store, created in 1852, revenue exceeding €42 billion
- Indirect procurement is €35-40 million in annual spend
- Decentralized sourcing activities
- Manage the daily procurement value chain
- Ensure fast solution adoption, with minimal disruption
- Knows if targets are on track and cost-savings
- Time saved collaborating with departments
- Lightweight, easy to use platform easily integrated with procurement tools
Le Bon Marché is a shopping mecca whose opening back in 1852 heralded a new culture of commerce with a modern retailing concept “that would thrill all the senses.” The iconic department store is an important heritage house of the world’s leading luxury retail and manufacturing group, LVMH, with over 130,000 employees and an annual revenue surpassing €42 billion. Le Bon Marché must respect and adhere to the governing principles and commitments of the LVMH Group, including CSR practices.
Whether it’s reducing CO2 emissions, applying environmental standards across the procurement chain, or setting a suppliers’ code of conduct, Le Bon Marché is embracing a new era along with the challenges that go with organizational and operational changes.
The Need to Modernize Procurement
The manager of the indirect procurement at Le Bon Marché had a team of three employees, processing approximately €35-40 million in annual spend. Despite being less mature than direct procurement, indirect procurement has nevertheless evolved tremendously. He and his team have re-invented processes to standardize practices, educated internal stakeholders about the function and continue to advise on need specifications. His role was increasingly one of an internal business partner to the different department buyers, and collaboration was key to efficiently doing his job.
This required that he comply with budgets and get a handle on cost-savings. It also meant he needed to understand the needs of his internal stakeholders, share expertise, and draw from best practices of the parent group. Since each department of the store had their own Excel sheets and formats to keep track of suppliers and contracts, files and paper trails got lost as their owners moved elsewhere or left.
They needed to centralize and consolidate 100% of sourcing activities, and then communicate the right information to be monitored. They needed a tool to facilitate collaboration and manage the daily procurement value chain, including managing contracts and supplier base information.
What Le Bon Marché says about SpendHQ
“The best part of the platform is how it allows us to monitor and track. We know exactly what the cost-savings are, where we can optimize, and how much we are off or on target without waiting to analyze the data for reporting at the end of the year. The timely access to relevant information is really impressive.” – Manager of Indirect Procurement, Le Bon Marché
Immediate Value in a Lightweight Fashion
Aware that the LVMH Group used e-procurement tools, Le Bon Marché’s Indirect Procurement Manager decided to invite bids from several vendors. Some solutions were too complex for what he needed, adapted to large procurement groups, or were not very flexible.
In the end, due to its Pipeline Management and Savings module, Contract Management, and Suppliers Hub, SpendHQ’s procurement performance management was the only solution that matched all of the selected criteria:
- Operational in the shortest time possible
- Very easy to use
- Simple to access
- The right price
- Modular for easy integration
All supplier referencing has been centralized and updated, while information is clearly linked to the corresponding contracts.
“We save so much time and effort in coordinating and collaborating with all the departments. It is really one of the best solutions to develop our procurement organization one step at a time, while benefiting immediately from useful insights that are generated through our daily operations.”
Editor’s note: SpendHQ’s procurement performance management solution used by this customer was originally named Per Angusta, with the renaming following Per Angusta’s merger with SpendHQ in July 2022.