Consolidate the capital goods spend for three brands for a £10MM category

Background: A major U.K Retailer

The objective: To consolidate the capital goods spend for three brands for a £10MM category, conduct a spend analysis, categorise the spend, identify the opportunities, negotiate more favourable terms.

Work undertaken: The initial phase was consolidating the three brands capital goods spend, analysing what they spend, on which items and with whom. Once complete, the spend was categorised by product type both by brand and a consolidated basis.  Further analysis of the cleaned-up data, highlighted to a number of consolidation and cost-saving opportunities. These were then ranked into value and probability of success.

The top three were identified and managed on behalf of the client.  Each of the three categories identified presented a different set of challenges;

Category 1: A long-standing supplier who had the monopoly on the largest spend item, with little visibility on the cost  structures

Category 2: Multiple products and multiple specifications from different suppliers

Category 3: A common supplier charging different terms to the three operating companies.

Outcome: In each case, a greater degree of visibility was achieved, enabling a simpler more effective route to market, with significant cost savings achieved in Category 2 & 3 (over 10%).