Benchmarks & Client Cases

Profitability Increase
in Food & Beverage Industry 

The Challenge



• Poor quality suppliers: low service level, low OTIF and high defect rates

• Frequent stockout of critical raw materials, affecting production

• "Supplier dictates the rules" - limited leverage for negotiation

• Uncontrolled stock of raw materials and subsidiaries

Root Causes

• Different contract conditions for each supplier

• Strategic suppliers not identified

• Purchase of commodities not standardised

• No repercussions for suppliers who fail with service level agreements

The Solution

• Definition of strategic partnership model approach

• Contract renegotiation based on standard contract model designed for each supplier category

• Definition of alternative suppliers for critical materials

• VAVE Projects: Value Analysis Value Engineering in order to identify opportunities to reduce complexity and/or quantity of materials

• Process Design to reduce the Lead Time of the material approval process

The Results

The project had a Payback period of 6 months with annual savings in excess of £1.6 million.


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