This national brewing group produces high-quality products in high volumes – just one plant is capable of filling 25,000 bottles per hour. The internal procurement team had done a great job of edging unit costs down on the manufacture and supply of bottles, leading to better commercial terms and a marginal uptick in profits.
But the bottle supplier felt commoditised and sought to reduce costs in its own processes to minimise the impact of the lower unit price. This, in turn, challenged the brewer’s own environmental objectives. And the less collaborative relationship also resulted in fewer incentives for the supplier to bring innovative approaches to the brewer – which meant it was less able to respond quickly to market conditions and meet the demands of its own tenant publicans.
Proxima was able to come into the situation as a trusted, open third party, bypassing the more negative aspects that had developed in the relationship with the supplier. And without the baggage of historic practice, the Proxima team was able to look at a seemingly very straightforward supply relationship – shipping bottles to breweries – with completely fresh eyes.
More importantly, we were able to look at the way the bottle supplier fit into the broader supply ecosystem – from bottle manufacture right the way to the ale-lover’s lips. Proxima's approach to procurement stresses that there’s no such thing as a commodity supply – every aspect of every product of service being procured can be tailored to optimize its impact on the broader strategy or customer experience.
So we started with the bottle design – working with the supplier to deliver a lighter bottle with the same strength and cosmetic qualities, lowering their costs and reducing transport outlay. Based on wider industry knowledge, we helped them develop a new way of shrink wrapping pallets, again lowering cost and reducing onward handling effort. And we spotted an opportunity to add one extra pallet on each stack, speeding up bulk handling and improving storage efficiency.
But perhaps the biggest impact was rebuilding the relationship around better communication. In particular, we helped the brewer share sales forecasts – after we discovered that it was predicting a 10% increase in unit sales for the following two years, but hadn’t told the bottle-maker.
This engagement worked for all parties. The bottle-maker reduced materials outlay and manufacturing lead time. Logistics costs fell, too, thanks to better delivery optimisation and lighter loads. And thanks to the improved, collaborative relationship between the parties, the bottle-maker is now engaged around innovations that should support strong market positioning for our client.
Ultimately, this was a powerful triple bottom line play. In pure cash terms, Proxima delivered USD $750,000 (£500,000) in reduced costs. But the brewer could also boast a reduction in environmental impact from both the manufacturing and logistics improvements.