Case Study 1:

Long Term Relationship Yields Big Returns – Cumulative Savings Over Ten Year Relationship Exceeds $125MM

Background / Business Challenge:

• Leading U.S. Food/Meat Products Manufacturer
• Purchasing decentralized across BU’s
• No enterprise-wide sourcing efforts conducted to leverage total volumes

The company, a U. S. based, multinational manufacturer and marketer of high-quality, brand-name food and meat products, had operated as separate and distinct business units over its history, but had grown to a point that significant supply chain opportunities were going uncaptured and enterprise volumes were not being leveraged.  The company did not have the resources, systems, processes or expertise to take optimal advantage of these opportunities.

In 2003 Provident was asked to lead the effort to begin to develop an enterprise-wide supply chain that reduced the number of total suppliers, apply sophisticated sourcing methodology and leverage enterprise-wide volumes for best pricing and services across many of the client’s key Packaging and Ingredient categories.

Solution:

• Implemented sophisticated sourcing process supported by web-based e-sourcing platform
• Enterprise-wide volumes now fully leveraged
• Supply base continuing to be rationalized
• New facilities added through acquisitions are integrated into the existing supply chain

Since that time, Provident has assumed ongoing strategic sourcing responsibility for
Packaging: Corrugated, Folding Cartons, Flexible Films, Labels
Ingredients: Sugar, Starches, Salt, Corn Sweeteners, Food Chemicals

Provident is now responsible for leading the sourcing efforts on the above categories as each respective supply agreement comes up for renewal, as well as for integrating new facilities, gained through multiple acquisitions, into the supply base that Provident has developed.

• On Packaging categories, we are in the third round of placing these categories under three year supply agreements.
• On Ingredient categories, we constantly monitor the markets, interact with suppliers and communicate with the business units to understand the latest needs.  We lead the effort on each of the above categories to annually take advantage of the very best possible market positions.

Results:

Over the past ten years, Provident has delivered cumulative cost savings in excess of $125MM. Of further note:

• Although we are on the third sourcing event on Packaging categories, we are still capturing double digit savings and reducing the supply base.
• Our Ingredients group just took advantage of market conditions to deliver in excess of $2MM in cost reductions on Sugar and Salt for 2013.
• We provide ongoing market updates and insights on the categories that we are involved in, furthering client staff training and development.
• We have identified suppliers that are best fits for client’s business / growth plans and for their product lines

Case Study 2:

Significant Savings on Film – Snack Food Manufacturer Saves 37%, Secures Multi-Year Supply Agreements

Background / Business Challenge:

Company: Snack Food Manufacturer
Location: North America
Spend In Scope: $2.4 MM
Categories Managed: Film

• No central capture of specifications or pricing
• No formal supply agreements in place
• No mechanism in place for pricing new items
• Supply value measured by suppliers’ ability to react to short term business needs
• Strong relationships with incumbent suppliers
• Unique structure to meet specific product protection requirements
• Unique barrier properties to maintain product freshness

Solution:

FREEDOM TO FOCUS
Provident enables clients to focus their resources on more strategic activities and their core competencies, which drives results to the bottom line

• Gathered and compiled specification and spend metrics across company
• Performed business needs analysis for client
• Organized and lead company-wide sourcing team
• Leveraged total company spend volume with comprehensive sourcing effort
• Managed transition of business to new suppliers

Results:

• Hard savings on film of 37%
• 90-day transition of business to new suppliers including participation of Provident’s Packaging Engineering team
• Administered multi-year supply agreements defining services and pricing terms
• Provided additional criteria for client’s supplier evaluation program
• Mitigation of economic risk in underlying commodity markets by pegging prices to published resin indices
• New suppler introduction fueled innovation process, resulting in further savings

Case Study 3:

Double-Digit Corrugated Savings – Snack Food Manufacturer Saves 13%, New Supplier Fuels Innovation and Additional Savings

Background / Business Challenge

Company: Snack Food Manufacturer
Location: North America
Spend In Scope: $2.6 MM
Categories Managed: Corrugated

• No central capture of specifications or pricing
• No formal supply agreements in place
• No mechanism in place for pricing new items
• Supply value measured by suppliers’ ability to react to short term business needs
• Strong relationships with incumbent suppliers
• Minimal supplier involvement in ongoing cost reduction opportunities
• Minimum supplier involvement in development of new item specifications

Solution:

FREEDOM TO FOCUS

Provident enables clients to focus their resources on more strategic activities and their core competencies, which drives results to the bottom line

• Gathered and compiled specification and spend metrics across company
• Performed business needs analysis for client
• Organized and lead company-wide sourcing team
• Leveraged total company spend volume with comprehensive sourcing effort
• Managed transition of business to new suppliers

Results:

• Hard savings on corrugated of 13%
• Less than 30 day transition of business to new suppliers including participation of Provident’s Packaging Engineering team
• Administered multi-year supply agreements defining services and pricing terms
• Provided additional criteria for client’s supplier evaluation program
• Mitigation of economic risk in underlying commodity markets by pegging prices to published linerboard indices
• New suppler introduction fueled innovation process, resulting in further savings