Realising extensive savings for Fortune Global 500 snack food manufacturer
Situation & challenges
Our client wished to streamline their procurement processes across several countries, and therefore launched an optimisation programme focused on increasing their bottom line through the reduction of purchasing costs and efficiency improvements.
Ayming was appointed by the executive team to identify and realise savings through a procurement maturity evaluation and validation of cost optimisation levers. With a total scope of €41m indirect spend divided into five categories, the benchmark highlighted that the client was paying a higher cost than market rate, thus creating significant procurement challenges.
Following this evaluation, the first phase of Ayming’s optimisation programme was a procurement diagnostic, enabling the project team to identify cost savings and correct process inefficiencies.
The second phase consisted of project delivery, focused on implementing the strategies defined during the diagnostic to deliver measurable results with bottom line impact. The target for savings was clear: achieve 6% in cost savings from the total project scope.
What we did
Identify: Working closely with our client’s team, we were able to obtain a clear understanding of indirect spend within the project scope and identified key areas for improvement. By creating spend transparency and assessing practices and processes, our team identified considerable cost opportunities across key spend areas, including finished product transportation, G&A and marketing.
Transform: Our detailed optimisation programme was tailored to the specific categories to address the different challenges presented. This programme was implemented with a key focus on delivering sustainable cost savings.
Manage & Sustain: The optimisation programme also looked at improving the planning and procurement processes in order to equip our client with the right methodology and tools to sustain future benefits.
And How We Helped...
Clear results were achieved for our client:
€41m of indirect spend was analysed and addressed.
€948k in cost savings accounting for 6% of the total in-scope category savings, enabling our team to meet the savings target.
€385k of annual savings realised within the year after project completion.
About Our Client
A wholly owned subsidiary of a Global Fortune 500 company. Founded in the 1960s, our client is a leading manufacturer in the global snack food industry.