The European arm of tyres firm Goodyear Dunlop expects to save more than £30m in two years, after signing a 10-year business process outsourcing contract with IBM.
The deal, which will see IBM taking control of much of the procurement process for indirect supplies, forms part of Goodyear Dunlop Tires Europe’s efforts to reduce overall costs by £800m by 2005.
While Goodyear will retain its core purchasing competencies, the activities of between 50 and 80 employees will be transferred to IBM, on a phased basis. The main savings will be achieved by using IBM's procurement organisation, which will negotiate on behalf of Goodyear Dunlop, the companies said.
The procurement-to-payment project will establish a consolidated system across all 15 countries mandating a strict procurement process for all employees.
Indirect supplies include such items as telecommunications, IT, business travel, office supplies, marketing and advertising, manufacturing maintenance and repair expenses and professional services. They do not include the company's purchase of raw materials.
Michael Roney, president of Goodyear Dunlop Tires Europe, said, “Goodyear Dunlop has made tremendous progress in the past two years introducing new products and serving our customers. This outsourcing programme enables us to obtain major cost savings.”
Initial implementation of the project has already started following a review phase. The programme is expected to be fully operational by early 2005.