Challenge
The client was a global distributor of FMCG with a strong presence across Asia. It managed a significant portfolio of brands and operated across the full value chain, from sales and merchandising to supply chain management. In late 2018, the business launched a transformation program to reverse six years of flat top-line growth and declining profitability. One of the most significant opportunities identified was warehousing and transportation, a critical cost-to-serve area in Southeast Asia.
Procurement, however, faced significant bottlenecks due to stretched resources. To accelerate execution and maximize in-year benefits, the client required external expertise. An initial transport category strategy was developed to secure stakeholder alignment and launch an RFI process. We were then engaged to leverage deep third-party logistics (3PL) expertise to deliver the end-to-end sourcing process, drive negotiations, and lock in savings.
Approach
A rapid, structured sourcing program was developed, focused on unlocking immediate savings while strengthening the foundations for long-term supply chain efficiency.
The approach included:
- Quick wins through sourcing events – Engaged with incumbent providers to secure rapid cost concessions.
- RFP design and management – Developed comprehensive RFP documentation, establishing clear technical and commercial evaluation criteria.
- Rigorous evaluation – Facilitated structured supplier assessments to ensure proposals aligned with cost and service expectations.
- Negotiation strategy and leadership – Defined negotiation tactics and led commercial negotiations to maximize value.
- Post-award transition support – Identified key risks and implemented mitigation measures to ensure a smooth transition to new transport providers.
This approach combined commercial rigor with execution speed, ensuring delivery at least three months faster (50%) than if the process had been managed internally.
Results
The sourcing initiative delivered significant operational and financial impact:
- Supplier consolidation – Reduced the number of primary 3PL transport providers from 17 to 10, simplifying operations, tightening service levels, and improving compliance.
- Savings achieved – Delivered run-rate EBIT savings of 13–15% against total annualized transportation costs, outperforming the original savings target by 30–50%.
- Execution speed – Achieved results three months faster than an internal process could have delivered.
- Additional value opportunities – Identified further efficiencies in warehousing pick-and-pack operations.
With this support, the client achieved a step change in supply chain efficiency, delivering material cost savings and operational improvements. By consolidating suppliers, optimizing procurement processes, and accelerating execution, the business strengthened its logistics model, reduced complexity, and positioned itself for long-term profitability improvement.
The project not only unlocked double-digit transportation savings but also set the stage for further value capture in warehousing operations, supporting the client’s broader turnaround program across Asia.
This project was delivered by Proxima’s APAC team, under the former brand name, ArcBlue.
