New Procurement System to Cut Major Costs for Mesta

Every year, Mesta employees make purchases for billions. Now they have chosen a new system that will give them better oversight and cut significant costs.

– At Mesta, many people make purchases and we buy a lot. We have been looking for a system that helps us maintain oversight and order, while also streamlining and reducing costs related to procurement. With the new system, we expect to reduce costs by several million, says Camilla Lundblad, Head of Procurement at Mesta.

The procurement system is provided by Vieri, which is market-leading in procurement solutions. They are one of Norway's 50 fastest-growing tech companies, and deliver services to both the private and public sectors.

Could save tens of millions

– Ultimately, procurement is about control and costs. Procurement is a discipline in itself. When many people place orders and you buy a lot, mistakes can happen. Even though the individual mistakes are small, the sum of everything can impose unnecessary costs on the company, says Lundblad.

– We needed a system that ensured correct purchases, access control and invoice handling. For us, it is important that 500 employees with purchasing authority use the right agreements and get the right product at the right price. Vieri could deliver solutions that met our needs, and is also open to developing solutions for future needs, says Lundblad.

Øystein Wien is a Senior Solutions Advisor at Vieri, with many years of experience in procurement.

– By making all purchases in one system, you increase what we call agreement loyalty. In short, this means that when we can guarantee a supplier that we make purchases from them, we also get higher discounts, says Wien.

The procurement organisation Tradebroker estimates that the benefit from discounts obtained through agreement loyalty is up to 7 per cent of ordered volume. In addition, the Norwegian Agency for Public and Financial Management has previously estimated that you achieve a process saving of at least NOK 200 per order, simply by digitalising the procurement process.

– Our experience in the construction industry is that there are enormous resources to be saved by streamlining procurement. When Mesta makes purchases for billions, the benefit of streamlining the procurement process can be many millions, says Wien.

Planning a new service

Mesta and Vieri have plans to develop an entirely new service for project procurement. The idea came from Mesta when they were choosing a procurement system provider.

– We have a need to be able to split our purchases into different stages. For example, when we are going to put up several signs along a road, the sign consists of many different components, but we don't need them all delivered at the same time, says Lundblad.

– That is why we gave Vieri the challenge of creating a proposal for a service that could function as a kind of shopping cart for an entire project. The idea is that you can add everything you need, schedule orders according to when you need them, and get a full overview of what has been purchased, what has been received and what remains, says Lundblad.

Will meet a major need

Øystein Wien at Vieri sees that more companies in the construction industry have a need for project procurement.

– This will both streamline procurement, simplify project management, and cut costs where previously there was a need to store goods that had been purchased but were not yet to be used, says Wien.