Ebit identified an opportunity to save its client money through a benchmarking exercise that was undertaken across carrier bags and packaging. Furthermore at the time of the exercise the client was suffering from demand outstripping supply primarily due to challenges in devising forecasts due to the rapid growth of its international business and structure. In turn this was leading to increased costs to catch up with demand. The opportunity existed therefore to overhaul process in addition to securing best price.
Because of Ebit’s experience buying and managing packaging for growing, international retailers, this was an area that real value could be added. Ebit began by understanding the current product specifications, supply base and pricing.
Attention was given also to building up a forecast process that had input from the appropriate parts of the business and used robust, proven measures to predict demand accurately. New control measures were put in place working with the supplier and the client to build flexibility into the buying and supply process. This ensured spikes or falls in demand could be allowed for and better managed.
Pricing was re-negotiated following a benchmarking exercise and with more certainly in the process, commercial benefits were gained.
A 10% reduction in packaging and bag costs were delivered and since implementation no issues have been encountered in meeting demand. An on-going forecast review process has been built to manage stocks going forwards. Ebit have an active role in delivering for the retailer in this area ongoing.
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