Case study – procurement
Reducing ingredients and packaging costs by 3.5% per category
We build sustainable capability through customised training
Our approach is data-driven, ensuring objectivity We worked with a global food manufacturer spending c.$1.3bn on over 12,000 individual items - it was hard for buying teams to achieve economies of scale. To protect margins due to inflation, the client needed to reduce costs by ensuring supplier cost price increases were fair. We used data-driven cost models to ensure objectivity and identify whether suppliers were passing through ‘unexplained’ inflation (e.g. wage increases in production labour for other customers).
We boost buyer confidence by identifying alternative supply options These data-driven cost models gave buyers confidence. We conducted extensive market research to find potential new suppliers who could meet our demand if negotiations with incumbent suppliers failed, and this helped buyers to push harder in negotiations, leading to supplier changes in certain instances.
12,000 individual items in scope
3.5% average cost reduction per category
Buyers themselves may be highly skilled, but many supplier negotiations require a team of experts, including Technical Managers, Product Developers, Commercial Managers, Legal Teams and more. We spent time understanding team requirements and developing customised cross-functional training and governance aligned with a common objective.
“This is the way we buy now – suppliers will have to get on board, and buyers will be assessed on their ability.” CCO
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