Problem
The organisation was dealing with an increasing level of packaging waste and a supplier base in excess of 10 different vendors that were selling the same products to our client.
The annual spend on packaging was ~€5m.
Inconsistent delivery models and increasing pricing were also an issue with the main suppliers. The stakeholders were struggling to keep up with the overhead of managing the supplier relationships.
Solution
The objective was agreed to consolidate the suppliers and go to market for the whole packaging business. After a thorough demand management exercise, we tendered the business, inviting the 7 largest incumbent suppliers.
We decided to award business to 3 suppliers who would supply our client with all their global packaging needs.
Results
By consolidating the supplier base and negotiating new rates and terms with the selected suppliers we secured savings of €1m over a 3-year period.
With new contracts in place, competitive rates and clear SLA’s, the stakeholders could focus their attention in other more strategic activities knowing their packaging suppliers would cover their needs in an efficient way.
