Cut material costs via pan-European supply company
Case study:
Cut material costs via pan-European supply company
- Situation
- A decentralized food company ran 30+ production units across Europe with high portfolio, supplier and process complexity, driving elevated costs
- Fragmentation and supplier direct deliveries into production units prevented scale, making a pan-European buying and supply chain setup necessary to reduce the cost base
- Actions
- Defined a pan-European product catalog and harmonized specifications, reducing SKU complexity across countries
- Mapped the best local items to the pan-European catalog and phased out weaker local items
- Consolidated suppliers for catalog items, ran initial re-tenders and shifted volumes to preferred partners to capture scale-based cost reductions
- Built a pan-European supply chain with centralized bulk buying and multi-temperature distribution, replacing wholesaler and supplier direct deliveries and cutting inbound delivery complexity at sites
- Selected and contracted pan-European logistics partners through a competitive tender with multiple negotiation rounds, locking in terms and SLAs
- Set up a European buying company with clear roles, processes, interfaces and transfer pricing for country organizations and production units
- Results
- Rolled out a pan-European catalog with 35% fewer SKUs and delivered 15% material cost savings by mapping and scaling the best local items
- Defined and launched a multi-temperature supply chain platform, achieving a 20% improvement versus initial bids and serving 75% of European spend
- Launched a central European buying company with mandate and ownership for pan-European spend, including specification setting, global tenders and ongoing catalog optimization