MAnufacturing industry Case study
 

Practice - Strategic Sourcing
Sector - Consumer Goods Manufacturing
Category - Industrial Cleaning
Geography - Europe
Baseline - € 3.5m
Savings - € 1.1m (>30%)

Our client was the world’s largest manufacturer of glass tableware, with global coverage and manufacturing facilities in France, Russia, China, the UAE, and the US. Annual turnover was in the region of € 1Bn.

The industry had been buffeted in recent times by the arrival of lower-cost competitors from Central Europe, the Middle East, and China, who put the incumbent players under an increasing price squeeze. In consequence, the Client decided to pursue cost reduction, inter alia by launching a Strategic Sourcing exercise across its Global operations.

The Triton Strategic Sourcing team used the following methodologies and levers to secure the savings and institutionalize them:

• Adopting a “zero-based” approach, in which potential suppliers were invited to bid resource (staffing) levels against a menu of three Client-defined levels of cleaning standards;
• Disaggregating the prices for the services not only by type of operator and by task, but also for all of the ancillary costs related to the provision of the service (consumables, equipment, etc).
• Introducing new “challenger” suppliers into the process; over ten reputable new suppliers were invited to tender in a highly-structured and disciplined process.

The above was achieved by a joint Triton Associates/Client team. Key elements contributing to the success of the project included:

• Obtaining buy-in from the key stakeholders (Manufacturing, Engineering) – this required numerous man-days of workshops, discussion groups, and one-on-one meetings.  
• Extensive interaction with the leading vendors, to review the feasibility of their offer, down to the level of each individual operator.
• Engaging the vendors to commit to take over the work force that had been freed up due to applying the right staffing levels and/or to negotiate compensation for any enforced redundancies. The fact that this was accomplished smoothly in a highly-unionised environment was a testimony to the thoroughness of communication to the vendors of this issue, as well as the high degree of engagement between the Project Team and the Vendors.