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    Geosynthetic Lining Manufacturer Success Story

    Creating a sustainable competitive advantage through procurement excellence

How to reduce costs, win bids and maintain profitability in the global commodities market

The challenge

Our client is the world’s leading producer of geosynthetic linings, a product used in the creation of plastic linings for landfills, mining applications and other end uses. Despite having emerged from bankruptcy with renewed strength and liquidity, the company was suffering fall-out effects in terms of how it was perceived by its suppliers and customers.

The company’s private equity owners recognized that they needed to make rapid and sustainable changes to the cost structure and asked Maine Pointe to deliver these changes by:

  1. Identifying ‘quick wins’ where immediate savings could be made
  2. Re-addressing the supply base from a domestic and global perspective and rebuilding the company’s damaged reputation 
  3. Re-engineering the alternative resins selection process to enhance overall quality, cost and operational efficiency
  4. Implementing a strategic procurement organization with supporting documentation and training on world-class procurement policies and procedures to ensure that savings would be repeatable and sustainable

This story is for private equity executives and portfolio company CEOs who:

  1. Seek to dramatically improve EBITDA through both ‘quick wins’ and sustainable changes
  2. Face difficulties with suppliers and customers following an operational or financial turnaround
  3. Want to re-address their relationships with domestic and global suppliers
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Creating world class procurement capabilities

Given that the client had recently been through bankruptcy, which impaired the perception of its creditworthiness as well as its relationships with some suppliers, there was skepticism that Maine Pointe could help – especially as their direct materials (resins) were so specialized. Maine Pointe’s team first had to set about gaining the trust of client team members and rebuilding supplier relationships to identify the ‘quick wins’ that would drive immediate cash impact to the bottom line. More specifically Maine Pointe’s approach included:

  • Working closely with the new CEO to regain the trust of domestic and global suppliers and improve the company’s reputation in the market place
  • Leveraging the company’s global footprint to gain access to new markets and suppliers, helping them to buy their current product at a lower price on a sustainable basis
  • Identifying a ‘game changing’ alternative resin capable of delivering equal, or better, finished product performance at a lower cost
  • Creating an organizational structure with supporting policies, procedures and processes to manage the strategic elements of sourcing and the tactical elements of buying and ensuring savings are repeatable and sustainable 

The results

The direct procurement model Maine Pointe implemented made it possible for our client to take control of both the cost and the quality of their product, resulting in:

  • 50% of required volumes switched to direct sourcing from low-cost countries
  • 27% saving in delivered cost of quality product
  • Virtual elimination of non-conforming product arriving at plant
  • Significant reduction in dependency on importers from the value chain
  • Increased visibility and speed of reaction to changing market supply and demand profiles
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Exceeding client expectations

 

Maine Pointe took us to a place we didn’t know we could get to, within the turn of a season they gave us what would have taken 3 or 4 years to achieve.” - CEO

Lessons learned for other executives

  • You can drive down your direct costs through supply chain disintermediation
  • It is possible to redistribute your value chain so that it favors you
  • You can mitigate the risk to your business from outside influences by developing a wider global portfolio of direct supplier relationships

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