A foreign-owned medium-sized company with a 20M yuan procurement budget suspected it was overpaying for supplies. Internal attempts to gain transparency were blocked. PSU was engaged to create an impartial audit, leading to the discovery of systemic fraud and a 30% annual cost savings.
| Key Stats | |
|---|---|
| Annual Procurement Budget: | 20M CNY |
| Overcharges Identified: | 10% – 90% |
| Annual Savings Delivered: | 6M CNY (30%) |
The Problem
The General Manager of a foreign-owned company in China had a strong “gut feeling” they were overpaying for basic supplies. When they checked market prices online, their suspicion was confirmed. However, internal attempts to fix the problem were met with resistance from their own procurement department, resulting in only symbolic savings. The client lacked the transparency to identify the root cause.
Our Action
PSU was engaged to conduct an independent investigation using our proprietary “Pointed Benchmarking” method. This service combines a fraud investigation with expert market-price benchmarking.
- Benchmarking: Our team analyzed the client’s key products and compared the prices they were paying against identical products on the open market. We confirmed they were being overcharged by 10% to 90%.
- Investigation: We ran a discreet background check on the company’s purchasing manager. Our findings showed the manager’s standard of living was far beyond their known income level, a classic red flag for kickbacks.
The Outcome
Armed with PSU’s evidence, the client had the proof of poor performance needed to dismiss the compromised procurement team.
PSU’s expert team temporarily took over the company’s procurement function to stabilize the supply chain. Within five months, we had vetted, negotiated with, and implemented a new set of reliable suppliers.
The result was a 30% reduction in purchasing costs, saving the company 6 million yuan in the first year alone.