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Optimizing Sourcing, Construction, and Cost Reduction of Millions (CS286)

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This story is for CEOs who:

  1. Are concerned about the costs of expansion
  2. Have a supply chain that has not kept pace with the company’s growth
  3. Need a better understanding of and control over costing and development cycles

The Challenge

What started out as a personal hobby turned into a chain of over 60 barbeque joints in 8 states, with the goal of doubling that number. That fast growth in joints left the company with entrepreneur-level procurement and construction processes and tools. Pandemic supply chain issues caused skyrocketing costs and major construction delays, affecting revenue. At the same time, a long-term distributor contract locked the company into less than optimal costs for their main food ingredients.

Bringing visibility into the end-to-end construction supply chain to control direct and indirect costs

SGS Maine Pointe:

  • Traced the critical path for roll-outs and gave the company greater scalability and certainty over construction
  • Reduced direct and indirect material costs
  • Improved access to data with new scheduling and costing tools that opened visibility into spend
  • Created dashboards based on KPIs and data analytics that provided a single source of truth
  • Initiated a procurement management operating (PMOS) system that matured the procurement department and raised its ability to control costs

Lessons learned for other executives

  • The control of spend begins with trustworthy data and the right tools to create visibility
  • Creative strategic procurement techniques can ameliorate bad contracts
  • The processes that worked in the past are not necessarily the ones that will open up the future

The Results

  • 8% savings in development
  • 10% reduction in build-out cycle
  • 11% reduction in cost-of-goods sold
  • Improved visibility into a complex construction supply chain
  • Improved company’s competitive position
  • Built procurement management operating system (PMOS)

 
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Optimizing Sourcing, Construction, and Cost Reduction of Millions (CS286)

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