A world-leading food processing and distribution company was buying 80–90% of its products through import brokers. Management had little front-end visibility and limited knowledge of supplier costs and capabilities. In addition, they did not fully understand how value and costs accrued throughout their supply chain.
Under pressure from competitors, they contacted Maine Pointe for help. The challenge? To achieve savings on direct raw material spend through supply chain disintermediation and transform the way they understand global movements in their value chain.
Our analysis team found that their procurement process was tactical in nature and mainly focused on ‘feeding the factory’. There was no long-term strategic procurement plan. In addition, the absence of any robust quality testing at the point of origin meant that our client had to bear much of the cost of processing, returning and replacing sub-standard product. We conducted a detailed analysis of the supply market in three low-cost countries, producing a sourcing plan that improved both the cost of quality and quality itself and included:
The direct procurement model which Maine Pointe implemented made it possible for our client to take control of both the cost and the quality of their product, resulting in:
By implementing our robust methodology against a well-defined plan, we delivered significant cost savings that were not regarded as possible by senior executives at the beginning of the engagement.
Maine Pointe took us to a place we didn’t know we could get to, within the turn of a season they gave us what would have taken 3 or 4 years to achieve.” CEO