Case Study - How we saved our client £750k on a cartons project
31st January 2014
£750k savings, a 34% cost reduction and reduced risk. That’s the result of our Cartons project
Our Client: Our Client was a medical device manufacturer specialising in drug delivery devices. A UK born and bred company they also have a strong presence in Europe and the US. With a sales turnover of over £60m and 600 employees they had little focus on their £23m material spend prior to our appointment. A tail-end supply base approaching 1000 companies could be seen and virtually none of their suppliers were covered by contracts or Service Level Agreements.
Project: Our brief was to introduce a new carton supplier to minimise supply risk and improve COGS (Cost of Goods Sold).
Actions: After fully understanding the needs of the business through a detailed and thorough sequence of meetings with key stakeholders we developed a comprehensive on-line RFQ process using e-RFx software called Zycus. We drilled down to 6 competent suppliers and held an industry-first supplier day to standardise expectations and learn from their experience. Following this and a second round of bids we created a shortlist of 3 companies for which to go into face-to-face negotiations. Another round of negotiations and executive agreement highlighted a new primary supplier choice with the incumbent as a secondary source. Following the procurement process, we project managed through the implementation, negotiating and finalising commercial agreements along the way.
Result: Our client now has a primary and secondary carton supplier in place with clearly negotiated and understood terms of business including service level agreements and KPI’s. The procurement process delivered an outstanding 34% cost reduction with contract benefits totalling over £750,000. The internal stakeholders have new ways of working including providing quarterly demand forecasts to the suppliers. The entire end-to-end process took just under 12 months with benefits commencing after the first 16 weeks.
Summary: In summary, a new supplier was identified offering a 34% cost reduction. We significantly mitigated risk by maintaining the incumbent as a second source. We introduced and trained in new and innovative ideas such as utilising technology to support the process (our clients first) and the supplier day (an industry first.)
To find out more or ask any questions, please feel free to contact us on 0114 213 8306 or firstname.lastname@example.org.
Categories: Case Studies, Cost Control, Cost Reduction, Consultancy, Health Technology, Medical Device
- East Riding businessman invited to address national conference
- New group launched to address supply chain challenges facing medical companies
- How ethical is your procurement and supply?
- Case Study – Travel procurement project highlights over £660k savings per annum
- Case Study – An ERP project for multi-million pound medical company
- Sheffield medical technology consultants help Oxfordshire Medical Device manufacture to choose ERP System
- High praise for Lime Associates’ James Cooper at national med-tech conference
- November newsletter
- Tri-partite event unites medical purchasing and supply chain professionals
- Representing the client - the importance of trust in third party relationships
- Case Study - World carton board market interrogated to identify sourcing opportunities
- "Time well spent" - CIPS Health Technology Group Launch event
- CIPS Health Technology Launch Event
- Purchasing and sales - best of friends?
- Top 10 Tips for your next CIPS awards
- Specialist Health Technology Consultancy celebrates second successful year
- Lime Associates' Chairman on the Radio
- James Cooper's in the news
- One is the magic number for Lime Associates' Chairman
- New group attracts both global giants and SMEs
- Lime Associates negotiates hard to deliver recruitment savings
- New Group Launched to address purchasing and supply changes facing medical companies
- CIPS Health Technology Group Speaker Biographies
Newsletter Sign Up
Enter your email address below to subscribe to our newsletter.