20 January 2023
Topics in this article
  • Manufacturing

Our client was a leading European manufacturer in the sports nutrition market. The project aim was to optimize value within the most significant expenditure categories, explicitly focusing on protein products, other raw ingredients, and packaging.

With rapid growth already achieved by the client and continued aggressive growth and targeted geographical expansion, there was a need to support the transformation of internal procurement capabilities while ensuring the supply base was capable of supporting future growth and strategic priorities.

The project followed on from an initial diagnostic, which identified ~7% overall savings opportunities across an initial three waves of sourcing activity, targeting raw ingredients and packaging.

Approach

The team categorized opportunities based on highest spend and potential for growth into agreed priority areas, utilizing a combination of buy better and spend better frameworks. Acting as the Client’s internal procurement function, reporting to the CPO, and supporting the design of the procurement function, we leveraged our procurement expertise and market knowledge to shift the buying approach from tactical to strategic. We led tender processes and renegotiated with existing suppliers while de-risking the supply base by introducing new ones.

We reviewed their technical and quality requirements, exploring product design options to control the consumption of the most expensive raw ingredients without compromising quality. This enabled the client to shift volume to the re-negotiated best-priced suppliers. Finally, we developed internal controls for the client to address maverick buying and establish the role of procurement as a critical business enabler through formulating and implementing a procurement strategy.

Results

We delivered 9% p.a. in cost savings through improved commercial terms and renegotiated rates. In addition, we professionalized the client’s procurement function, introduced competition, and unlocked the commercial benefits of changing relationships with critical suppliers from strategic to transactional.

“Proxima is not just another consultancy company about ideas and PowerPoint slides. They are ‘hands-on’ industry experts that, put simply, get the job done. They’ve provided a combination of commercial and operational expertise that integrated well alongside our team and brought with them templates, best practices, and real market insight, enabling us to move forward faster. They listen, understand, and challenge but above all add value and deliver real and sustainable EBITDA benefits.”

HEAD OF PROCUREMENT, THE QUALITY GROUP

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