Onshoring
On-shore SSC Implementation; MOB vs. Near-Shoring Analysis
Established a centralized Shared Service Center for Operational Procurement / Tactical Procurement within the country (central Europe) to streamline support functions, improve control, and reduce internal complexity.
Industry
Manufacturing
Direct/Indirect
Indirect
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Sourcing Context & Procurement Challenge
The organization was evaluating near-shoring options but faced growing regulatory and operational complexity across multiple shared service functions. Fragmentation led to inefficiencies in finance, procurement operations, and HR services. The procurement challenge was to conduct a make-or-buy analysis and implement a centralized Shared Services Center (SSC) for operational procurement / tactical procurement within central Europe.
Procurement Objectives & Strategic Levers
Goals included >20% TCO savings, improved process standardization, and tighter compliance controls. Strategic levers were location analysis (onshore vs. nearshore), automation potential, and harmonized SLAs. The objective was not just to reduce cost, but to increase control, transparency, and scalability.
Sourcing Strategy & Execution Approach
Procurement led a full business case evaluation comparing nearshoring to centralized onshoring. We assessed talent availability, wage models, and compliance risk. Once the decision for onshoring was validated, we negotiated lease and infrastructure contracts, selected software platforms, and sourced process outsourcing partners for non-core SSC activities.
Results & Values Delivered
The new SSC led to a 23% process cost reduction and 35% faster transaction processing. Compliance metrics improved due to consolidated audit trails and harmonized controls. Employee satisfaction improved through proximity, and the SSC became a platform for process automation and continuous improvement.
Role & Contribution
Procurement led the MOB analysis and chaired the investment committee that selected the SSC model. We oversaw facility sourcing, infrastructure contracts, and BPO partner negotiations. We also designed the KPI model and chaired the SSC governance board in the first 12 months of operation.
Conclusion & Reflections
Shared Services are not just about labor arbitrage – they are about control and scalability. This case showed that proximity still matters in complex regulatory environments. Procurement must speak both the language of cost and the language of compliance when reshaping operating models. In this case, the manouvering mass was not large enough to justify an outsourcing. In addition, the quality of the work as well as the language skills (being able to communicate with shop-floors etc.) was absolutely crucial.