Philadelphia, PA and Utrecht, The Netherlands May 14, 2001 e-Procurement for the Sara Lee Corp. is not just about sugar and chocolate. Few may know that Sara Lee also owns brands like L'eggs, Hillshire Farms, Hanes, Jimmy Dean and Ball Park. So when executives at Sara Lee headquarters decided to consolidate all of its purchases in Europe, it was a major undertaking.
In order to accomplish this, Sara Lee decided to outsource the region's procurement and sourcing operations with ICG Commerce, a Jenkintown, Pa.-based online procurement services provider. The company has been selected to launch a pan-European e-procurement initiative worth approximately $800 million over one and a half years.
ICG Commerce will be used to help each Sara Lee Division purchase indirect goods and services, utilizing such ICG capabilities as category outsourcing, hosted auctions, spot buy services, e-catalogs and online programs. The initial agreement calls for a launch in three divisions of Sara Lee's European operations: Sara Lee/Douwe Egberts, Sara Lee Meats and Sara Lee Branded Apparel.
Sara Lee is one of the first to deploy such a pan-European exchange and secure aggregated pricing. We view this as a significant step for Sara Lee and the European e-commerce market, said Frank van den Heuvel, Purchasing and Outsourcing Director for Sara Lee Europe.
Under the initial agreement, ICG Commerce will manage US$170 million of indirect purchases. Over the next one-and-a-half years, Sara Lee's European divisions intend to outsource nearly 80 percent of its purchases, or US$800 million, to ICG Commerce.
E-procurement is critical to Sara Lee's continued success and pivotal to our achieving the significant savings our business requires, said Mr. Heuvel. We expect to achieve savings and improve efficiencies across multiple points of our procurement cycle, which directly impacts our bottom line.
ICG Commerce's goal is simple: to enable Sara Lee to increase productivity and improve margins, said Paul Matthews, president of outsourcing for ICG Commerce. Companies like Sara Lee have complex supply-chain requirements that demand the most advanced technology and sourcing expertise to maximize the savings on their purchases. Their selection of ICG Commerce only further validates our comprehensive approach and ability to enable very large companies to improve their bottom lines.
(For more information on Sara Lee's global e-procurement efforts, watch for Looking Into The Global e-Future, the July cover story for iSource Business).