LVMH’s Le Bon Marché Gains Real-Time Visibility Into Procurement Performance
Global luxury leader’s flagship Parisian department store scales its procurement function one step at a time with Per Angusta’s lightweight and intuitive platform.
The best part of Per Angusta 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.
Indirect Purchasing Manager, Le Bon Marché (LVMH)
- Key facts
- World’s first department store, created in 1852
- Group’s revenue exceeds €42 billion
- Indirect procurement processes approximately €35-40 million in annual spend
- Centralize and consolidate all sourcing activities
- Facilitate collaboration and manage the daily procurement value chain
- Ensure fast adoption of the new procurement system, with minimal disruption
- Knowing exactly what the cost-savings are, where optimizations can be made, and if targets are on track to being achieved without waiting to analyze the data for reporting at the end of the year
- Time and effort saved in coordinating and collaborating with all the departments
- A lightweight easy to use platform that is easily integrated with existing and future procurement tools
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 its 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
Pierre Espel is the manager of the indirect procurement function at Le Bon Marche. He has a team of three employees, processing approximately €35-40 million in annual spend.
Throughout Pierre’s four years in indirect procurement at the store, he has seen significant changes in his job and its function. Despite being less mature than direct procurement, indirect procurement has nevertheless evolved tremendously.
Pierre 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.
“The biggest challenges for us were legacy practices and history. We had contracts dating back 10 to 15 years, some of which we were unable to locate, which meant we did not know what was in them,” said Pierre.
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.
Pierre wanted to end this. He needed to centralize and consolidate 100% of sourcing activities, and then communicate the right information to be monitored. He needed a tool to facilitate collaboration and manage the daily procurement value chain, including managing contracts and supplier base information.
Immediate Value in a Lightweight Fashion
Aware that the LVMH Group used e-procurement tools, Pierre 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 Supplier Base Management, Per Angusta was the only solution that matched all of Pierre’s selected criteria:
- Operational in the shortest time possible
- Very easy to use
- Simple to access
- The right price
- Modular for easy integration
The choice to go with a standalone system separated from the in-house ERP system was a deliberate one. Making changes in order to increase collaboration and streamline Source-to-Contract processes was hard enough and Pierre didn’t want his buyers further distracted from their daily tasks by complicated software that was too sophisticated for inexperienced users.
Buyer Collaboration and Consolidation: A Sure Win for Procurement’s Growth
“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,” said Pierre.
All supplier referencing has been centralized and updated, while contact and information is clearly linked to the corresponding contracts.
“With Per Angusta, we save so much time and effort in coordinating and collaborating with all the departments,” said Pierre. “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.”Download the PDF