Ready Meals Producer - Strategic Sourcing
Strategic sourcing of ingedients, packaging and freight delivered savings of 7 - 11%
Situation
Our client is a major producer of fresh ready meals for retail and food service customers nationally. The company’s product range was predominantly private label, with a small branded route business.
Several major customers had recently tendered their business, resulting in decreased prices and reduced margin for our client.
As a result, our client was urgently looking for reduce the cost of 3rd party purchases, which represented almost 60% of their cost base.
Our Approach
After conducting a diagnostic across all external spend, we identified five categories for sourcing: plastic packaging, freight, proteins and ingredients. These categories had not been sourced in the last 3 years, had seen significant prices in recent years and had not seen the benefit of falling commodity prices flowing through.
Our detailed knowledge of these categories allowed us to quickly document business requirements, identify suppliers to include and conduct a structured RFP process.
Results
The project delivered savings of 7 – 11% across the four categories, while maintaining the quality standards and service levels that our client required.