Augmenting Procurement Staff while transforming eleven multiple entities into one unified supply chain (CS230a)

Packaging Products and Services Provider

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 also augmented the client's procurement staff during the engagement. 

 Maine Pointe:

• Placed people, processes and information at the core of the organization, asking people to think differently about the way they work and adopt different behaviors
• Identified preferred suppliers and took a strategic approach to categories
• Generated category specific approaches for key items that are aligned across all divisions
• Helped suppliers see the future benefits of working with a growing, dynamic organization
• Made 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
• Migrated procurement from tactical to strategic (increasing the maturity of the procurement function)
• Used advanced data analytics to provide visibility to category management across the entire company and provide centralized, actionable information
• Put in place dashboards to enable the business to run the analytics process autonomously in the future
• Used the intelligence gained from data analytics to mitigate price increases
• Trained supply chain teams in strategic sourcing methods
• Trained 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