Thinking outside the box. Strategic sourcing delivers $1.3m in savings for leader in reusable packaging

Thinking outside the box. Strategic sourcing delivers $1.3m in savings for leader in reusable packaging

Thinking outside the box. Strategic sourcing delivers $1.3m in savings for leader in reusable packaging

Partner at Procura Consulting

 

Client

 

The leading provider of reusable plastic containers (RPCs) used by retail grocery stores, providing packaging and supply chain solutions to clients, with operations in 14 locations throughout the US.

 

The Challenge

 

Improve profitability whilst supporting a new Procurement Director to establish a central procurement approach for key categories and core products.

 

Approach

 

An initial Spend Analysis provided clear supply base transparency, enabling the new Procurement Director to prioritise activity in his first 100 days. The Opportunity Assessment then pinpointed a number of rapid impact workstreams and deep-dive, strategic sourcing opportunities on high-spend, strategic categories.

Procura’s support enabled the client to focus on operational delivery improvements, whilst the Procura team were able to deliver a programme of procurement cost reduction across factory indirect spend and the core, high-spend, categories of lumber and steel.

Multiple approaches were leveraged, including strategic vendor negotiation, competitive sourcing, vendor consolidation and global sourcing.

Whilst the initial sourcing delivered transformation profitability improvement, the project was also able to put in place preferred vendor lists and a structured, repeatable eTendering process to provide the client with the technology and methodology to sustain the benefits.

 

Results

 

  • $1.3m in actionable savings achieved through a program of procurement cost reduction
  • Consolidation of vendors with improved commercial terms with tiered pricing and rebates
  • Development of preferred vendor lists for annual bidding processes, especially for direct areas
  • Incremental savings potential with newly identified international vendors

 

 

Category Results Savings
Capital Equipment and Machinery 5.3%
Lumber 13.9%
Steel Components 7%
Facility Services 25.6%
Uniform Rental 31.3%
First Aid and Safety 8.2%

 

Procura provide expert services to clients which can assist as the economic situation recovers and businesses re-set for profitability. We would be very happy to talk through your current challenges and objectives and share our experience.

For further information or to discuss how Procura could help your organisation - please get in touch:

Email us: info@procuraconsulting.com

Call us: +44 (0)203 693 7275

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