Material cost reduction for a food service company through central supply entity
Case study:
Material cost reduction for a food service company through central supply entity
- Situation
- Decentralized food services company with 30+ production units across Europe faced high complexity in product portfolio, suppliers and processes, driving elevated costs
- The company aimed to establish a pan-European buying structure to leverage scale and capture synergies
- Actions
- Analyzed the product portfolio, identified harmonization opportunities and created a central product catalog with specifications, pricing and supplier information, including processes for maintenance and new product introductions
- Designed pan-European supply chains for fresh, frozen and ambient categories with defined requirements for lead times, inventories and transportation
- Conducted network analysis to determine optimal warehouse and distribution center locations
- Tendered warehousing and transportation services, evaluated proposals and negotiated final terms and SLAs with logistics partners
- Set up a European buying company with a clear operating model (structure, roles, processes), including interfaces and transfer pricing with country organizations
- Results
- European buying company established, staffed and fully operational
- Centralized procurement delivering more than 15% material cost savings
- Harmonized product catalog with 35% fewer SKUs rolled out across Europe
- Multi-temperature supply chain defined and contracted, achieving 20% improvement versus initial logistics bids