Indirect Material Cost Reduction Program - Accenture Zero Based Spending -
This document introduces Accenture's indirect material cost reduction program, "Zero Based Spending(ZBS)." While many companies have made progress in managing direct material costs, indirect materials often have purchasing authority dispersed across departments, and the expertise in sourcing (supplier selection and price negotiation) is often individualized, leaving significant room for cost reduction. ZBS is implemented in three stages: initial diagnosis (2-3 weeks), detailed investigation (2-3 months), and execution (3 months or more). In the initial diagnosis, accounting data is fed into ZBS-AI, which classifies millions of lines of transaction data into Accenture's standard categories, visualizing "who is spending, on what, and how much," and identifying cost reduction opportunities using category-specific benchmark data. Subsequently, cost reduction measures are formulated and executed using a set of initiatives. The compensation structure can be chosen between a fixed fee model and a fixed fee plus performance-based compensation model. For categories with low sourcing difficulty, a complete performance-based compensation model can also be implemented through a partner company (Company A).
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basic information
ZBS framework consisting of seven activities Automatic classification of accounting data by ZBS-AI Benchmark data for cost reduction by category Group of cost reduction measures Detailed investigation based on contracts, estimates, and hearings Compensation system based on fixed fees and performance-linked rewards Complete performance-based compensation model by partner company (Company A)
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Applications/Examples of results
【Purpose】 Visualization and reduction of indirect material (goods and services) costs Strengthening of purchasing governance Standardization of sourcing (supplier selection and price negotiation functions) and elimination of dependency on individuals 【Examples of Achievements】 Conducted initial diagnosis within 2 to 3 weeks, visualizing reduction potential by category Mapped accounting data of approximately one million lines using AI and various tools Collaborating company (Company A) supported PL improvements for over 2,000 corporations
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Accenture transforms change into power, providing 360-degree value to customers, employees, shareholders, partner companies, and society. We support Bristol Myers Squibb by leveraging generative AI and automation to accelerate clinical trials and streamline drug development. We consolidate our full capabilities as a reinvention service to solve the most challenging problems. We guide enterprise transformation to be executed on a larger scale and with greater impact.
