In one of his first efforts to cut marketing spend at pharmaceutical giant AstraZeneca, Sarmento Silva was able to slice $8 million from the company's $50 million spend for promotional printing services.

Having an MBA in marketing definitely helped Silva get his arms around the opportunity, but there were other keys that have helped the director of purchasing systems development and reengineering for the Wilmington, Del.-based company and his team succeed then and to succeed since.

For example, when Silva was with Rubbermaid as global manager of packaging and printing, he was involved in packaging, print and publications and worked with advertising agencies. "It was then that I realized that [companies] could source marketing spend."

So when Silva came to AstraZeneca, one of the first things he did was take control of the company's marketing spend. (Marketing spend encompasses market research, design services, creative agencies, promotional/planning agencies, commercial printing, and commercial broadcast.)

The first step: he put marketing spend opportunities into perspective and helped erase the myth that it is "a 'verboten' area for strategic sourcing."

Silva erased these myths by building relationships with the firm's marketing people and communicating to them his business case for more effectively managing the marketing spend.

And he started with printing. Because Astra-Zeneca had about 20 different printing suppliers when Silva joined the company three years ago, he created a strategic sourcing team, not to look at the suppliers, but rather to look at all of the different types of printing that that company needed.

"Then we benchmarked the industry and looked at the types of suppliers that were available," he continues. The team met with some existing suppliers and some new suppliers, made several site visits and created a short list of six suppliers and had them each do several jobs so they could benchmark the quality.

Each member of the team analyzed the results to make sure it met their needs. "In the end, we were able to corral 80% of our print to three suppliers," states Silva. As a result, AstraZeneca ended up saving about 16% on promotional printing while maintaining quality and brand awareness. "Once I was able to show a win there, I knew we would be able to expand the effort."

Silva created a cross-functional team of representatives from marketing, procurement, finance, and corporate management to investigate what else could be done.

Next, he defined individual goals and objectives for the project. "For example, a goal for finance [was] to come in 3% under budget," says Silva. "Purchasing's goal [was] to save 5% from the baseline that was established."

To maintain momentum, Silva continued to emphasize achievement of the specified goals and kept the team focused on the value of the expected savings and how much more the company would have to sell if those savings were not realized.

As he explains: If the project saves $1 million, translate that into how much more the company would have to sell to see that $1 million as profit. Once the team was working effectively, he began communicating with the company's marketing service providers so that they, too, could understand the change that AstraZeneca was making.

"Everyone needs to understand that marketing is not the same as buying computers," he says, but that it can be managed with strategic procurement tools.

"You have to understand the mindset of marketing suppliers," Silva says. "They are selling ideas, and you need to be fair with them and say, 'That is a good idea, and it's worth X, but it's not worth X plus X.'"