This client, a leading designer, marketer and manufacturer of indoor and outdoor cooking appliances for customers internationally, sources all of its finished goods in China. The company had been family owned for more than 40 years before seeking investment from a private equity partner to provide aid in achieving their goal for growth through acquisition.
With 100% of their manufacturing in China, the company was under threat from rising commodity costs. In addition, procurement was finding it difficult to negotiate lower costs from its three main suppliers. To overcome this, the PE firm and company CEO brought in Maine Pointe’s procurement experts to help create new optionality, expand their supplier relationships and reduce overall procurement costs.
Our analysis showed that the client’s procurement organization performed mostly tactical functions and lacked formal negotiating training. In addition, the company was reluctant to change suppliers due to the high cost of change and lack of additional approved suppliers. As a result, they had not qualified a major new supplier for several years. It was also extremely important to the client that their strong values and the trust they had established with suppliers were in no way compromised.
Maine Pointe identified a number of potential savings across multiple products. To help realize these savings we:
Working in close partnership with our client, and in the light of a 25% increase in raw materials, Maine Pointe’s strategic procurement experts delivered the following results: