The client is a leading producer of specialty chemical additives for the food, pharmaceutical and industrial market segments. Within these segments the products cover a broad range of applications including water, paper and metal treatment, agriculture, electronics, textiles, tablets, meat preservation and detergents.
The company was struggling to achieve the earnings and margins it needed across procurement and logistics at its plants in North and South America. With limited resources in-house, the board and CEO were looking for the right partner to infuse best practice and deliver sustainability. While some board members advocated bringing in in a tier 1 global consulting firm, the CEO had concerns about this approach. Given the size of the company, the CEO was not convinced that a large firm would necessarily bring its ‘A’ players. A strong recommendation from a board member who had seen the measurable results Maine Pointe delivered at another global chemicals company convinced them to contact us.
The company needed support in the strategic procurement of contract labor, MRO parts, packaging and logistics as well as organizational design and restructuring. There were no strategic partnerships with suppliers and spend was distributed across 700+ suppliers in MRO and 700+ suppliers in labor with very few contracts in place. In addition, the company had very poor transparency into spend analytics with little discipline around spend categorization and weak data integrity. At the beginning of the engagement, we assessed procurement at a maturity level 1.3 and logistics at 1.7 on the 5-level Total Value Optimization Pyramid™. To help them increase the maturity of both functions we:
The processes and tools we introduced helped the company move procurement up to a level 3.2 and logistics to level 3, with a clear pathway in place to get them to level 4. This transformation in procurement and logistics released 50% of working capital in their MRO inventory, enabling cash to be re-invested across the organization to improve performance and enhance competitiveness.
By transforming its procurement and logistics, the company has achieved the following:
Maine Pointe's approach to partnering is superior to other consultants I have worked with. The very disciplined methodology they employed delivered greater results, significantly faster than we could have achieved ourselves.” CEO