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Transforming eleven affiliated entities into one unified supply chain (CS230b)

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Packaging Products and Services Provider

Augmenting Procurement Staff while transforming eleven multiple entities into one unified supply chain
TVO Procurement

This story is for CEOs and PE firms who:

  • Benefit from a common strategic procurement platform but maintain the individual identity of acquisitions
  • Get better value and service from their suppliers
  • Achieve rapid growth in a decentralized company without causing significant unrest within affiliated organizations

The challenge

This leading PE-owned packaging products and services provider was built through acquisition of a number of family-owned businesses over a period of more than twenty years. The company has remained decentralized in nature with each add-on maintaining its unique identity to allow Sales to be responsive to specific customer requirements.

The decentralized, customer-centric organization had resulted in a fragmented, uncoordinated supply chain which was preventing the organization from leveraging the size of its spend as well as increasing complexity. The owner recognized that the business needed a more strategic, coordinated, enterprise-wide model to capture the value hidden in this rapidly-growing company without damaging the organization’s ability to provide customized solutions to its customers.

Maine Pointe’s challenge was to deliver cash and cost benefits and build a platform for growth while causing minimal disruption within the individual organizations.

 Maine Pointe:

  • Placing people, processes and information at the core of the organization, asking people to think differently about the way they work and adopt different behaviors
  • Identifying preferred suppliers and taking a strategic approach to categories
  • Generating category specific approaches for key items that are aligned across all divisions
  • Helping suppliers see the future benefits of working with a growing, dynamic organization
  • Making use of the skills and knowledge of divisional presidents (former company owners) to ensure they support the new strategy and take ownership of the results
  • Migrating procurement from tactical to strategic (increasing the maturity of the procurement function)
  • Using advanced data analytics to provide visibility to category management across the entire company and provide centralized, actionable information
  • Putting in place dashboards to enable the business to run the analytics process autonomously in the future
  • Using the intelligence gained from data analytics to mitigate price increases
  • Training supply chain teams in strategic sourcing methods
  • Training the operations group in logistics management of 3PL, private and dedicated fleets

Lessons learned for other CEOs

  • CEO sponsorship, effective communication and thorough planning are key to successful supply chain transformation
  • With the right approach to people and processes, you can achieve business evolution and retain the unique identities of acquisitions
  • You can add significant value to your organization by using data analytics to understand market dynamics and base-line spend

The Results

  • Improved EBITDA by 20%
  • Provided 5% savings across the enterprise
  • Delivered common processes and controls through the installation of a procurement management operating system (PMOS) and a logistics management operating system (LMOS)
  • Trained procurement, logistics and other key stakeholders to effectively implement and utilize these management operating systems
  • Installed a sustainable organization to support continued growth
  • Implemented data analytics tools and processes for better and faster decision making
  • Delivered a project ROI of 3.5:1

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