By reducing the number of items in our customer’s product range, we were able to reduce complexity, increase quantities, and thus strengthen the negotiating position.
Large caterers often offer too many products in their listed product ranges. The specifications are unnecessarily precise, of too high a quality for use in the meals, or only listed for historical reasons. Nevertheless this variety leads to handling efforts and inefficiencies on both the customer and the supplier sides. An analysis of the volumes at the product level, and the identification of duplication or very similar products lays the groundwork for are the basis of the first grouping. By steadily reducing the number of items and concentrating on the really important products the product range becomes more streamlined and efficient, on the one hand, and on the other it allows a better focus in terms of regular negotiations. In addition, the decrease of complexity and increase in volumes of items strengthen the negotiating position vis-à-vis the suppliers.
- Intelligent reduction of the high number of items purchased in the two bestselling product groups, meat and seafood
- Making full use of the bundling potential of the product groups
- Reviewing specifications for optimum suitability for the purpose in terms of both quality and costs (“fit for purpose check”
We can more effortlessly navigate the areas of tension between Quality, Purchasing, and Suppliers, than almost any other supply chain management consultancy. In this particular case, for the required product range redesign, we brought the most important stakeholders from Operations on board. After developing the optimal bundling of product groups on paper, this was validated with those responsible for the culinary side of things by means of professional product tastings, and then implemented in the purchasing processes.
Realisation of potential
We reduced the number of items in the national product range of our customer’s top two product groups from 848 to 327 (-61%) – without negatively impacting the offering and in accordance with the customer’s culinary. In total, our customer achieved savings of €1.4 million per year.