Case Study: Protein company consolidates spend across multiple divisions, reduces cost by over 22%
Major Midwest Protein company consolidates multidivisional spend of $8.2 Million using Master Distributor Agreements and achieves cost reduction over 22% and reduced their supply base by 50%.
Diverse business with varying product, spend and vendor base. Senior management’s goal was to establish common specification standards across the business units, consolidate the supply base and optimize spend company-wide. When required, R&D testing and verification was needed to validate material compliance. Additionally outside audits of new “Master Distributor” vendors would be required as part of the company’s total quality program.
Using a multi-phase approach, specifications were consolidated and standardized across all business units. The team then set out to identify Master Distributors who could support the business regionally or nationally. Using Provident’s online sourcing platform, vendors were invited to participate in a three-phase process. Phase One was used to reduce the pool of potential suppliers utilizing an extensive RFI. Phase Two involved collecting and analyzing data from detailed RFP. Phase Three involved “Face to Face” meetings to fine tune each vendor’s proposal. Utilizing all of this information the team identified who would be moving forward with a multi-year agreement.
By standardizing and optimizing specifications within the client’s system, Provident presented distributors with a well-organized, multiphase RFI and RFP process. As a result of those efforts the client experienced a savings of over 22%, more than double their original target.