Project success
Consumer Goods
Project at a glance
Client: consumer goods catalog supplier whose products are primarily imported from Asia.
Consulting activities:
- Interim management for procurement.
- Implementation of an international co-sourcing: support of purchasing activities in Asian countries for consumer goods
- Commodity group management
- Supplier development
- Integration of the sales department into the procurement department
Initial situation
- The long-time purchasing manager left the company, started his own business and took over some employees and suppliers in the process
- Constant price increases by suppliers
- Problems in meeting delivery dates
- Article losses due to insolvencies of the suppliers
- Knowledge of an orderly inquiry and tendering process is not apparent among employees in the purchasing department
- Specifications in tenders are strongly tailored to suppliers/products
Project success: 8-25% savings
Project execution
After taking over interim management of procurement, strategic procurement market research of new suppliers was conducted. Based on a commodity group analysis, items with functional specifications were systematically tendered and the new suppliers were audited. After a successful test order, the new suppliers were included in the supplier pool.
Result of the project: savings of 8 - 25% per product.
The second sourcing strategy minimized item failures and ensured schedule reliability. The intensification of competition led to price reductions. The establishment of a partnership with the existing high-performing suppliers as well as with the new high-potential suppliers in the form of supplier visits, telephone conferences, and trade fair visits has ensured further potential savings.
As part of the cooperation with the sales department, the latest product information and samples from suppliers were presented in sales workshops. Feedback and impulses for new products from the customer side were immediately forwarded to the suppliers. Involvement in sales enables procurement to respond promptly to market requirements and customer wishes in order to contribute to the success of the company.
