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Helping a leading fast food chain address procurement execution challenges
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Client:
Global fast food outlet
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Industry:
Consumer Packaged Goods
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Key highlights
- Over the past ten years, we have helped the client bring new skillsets to its in-house team, enabling it to deliver more value to its stakeholders
- Our support particularly focuses on the client’s direct categories, leading to an improved category strategy and decision-making process
- We have helped deliver cost savings for categories accounting for about 70% of the client’s total spend with a 10% saving in the beef category alone
Business challenge
One of the largest fast food chains in the world was facing execution challenges within its procurement operations. The CPO identified that lack of time and expertise were creating a negative impact on stakeholder and supplier engagement, as well as the overall performance against critical targets. Further, with multiple acquisitions of companies over the past couple of years, there was an increased need to attain procurement synergies, which further enhanced the team’s need for research support.
With finite in-house resources, the company recognised that some areas could be better delivered externally. The Smart Cube was engaged to provide new skillsets and a thorough understanding of the external market, in order to drive more informed decision-making across various key categories.
The Smart Cube solution
The Smart Cube worked as an extension of the client’s in-house team to provide end-to-end support for the category management process, particularly for direct categories. The focus was on analysing internal and external data to identify actions that would directly lead to cost savings and an increase in profitability. The wide variety of services provided included:
- Tracking the external market place and supplier landscape
- Identifying potential suppliers for existing and new product offerings
- Organising and executing e-tendering and RFx events
- Monitoring commodity prices and price forecasting
- Researching and identifying new product and ingredient sources
- Should cost modelling
These services have assisted in improving and strengthening the category strategy and decision-making process, as well as its execution and monitoring.
Value delivered
Over the past nine years, The Smart Cube has helped the client gain visibility, take informed decisions and achieve cost savings for categories accounting for about 70% of its total spend. The client has praised our transparency, strong partnering approach, quality of work and ability to deliver actionable insights and research.
Results from specific projects delivered include:
- Should cost modelling for processed beef category: We created a should cost model for processed beef, which helped the company to work with its partners to secure lower costs. This resulted in overall savings of 10% on the beef category and helped strengthen supplier relationships.
- Commodity price tracking: As part of our Commodity Intelligence solution, we created an online dashboard containing all relevant commodities across more than 50 direct categories. We researched and identified the critical pricing indices required and now track these in real-time on an ongoing basis, giving the global procurement team access to relevant up-to-date information wherever they are.
The returns can be measured by the multimillion-dollar savings that have been generated, on an annual basis, over the past nine years. In addition, the partnership has led to:
- Clear prioritisation of focus areas, enhanced visibility of external market conditions and regular monitoring for improvement and delivery of target cost savings
- Increased efficiency and productivity, leading to faster throughput of projects and therefore more savings
- Rise in time spent by the in-house team on stakeholder engagement, leading to a better understanding of business objectives and greater ability to influence decision- making, change and innovation
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