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Analysis and Insights

Case Study

A leading FMCG organisation was looking to leverage their spend and consolidate their Asia Pacific supply base for their packaging requirements. Each of the 8 business units had specific requirements, under the same packaging category with opportunities for suppliers across business units. Some of their suppliers also supplied to multiple business units in the region.

Solution

  • The client had previously executed E-sourcing initiatives with some success and were keento explore the opportunity of consolidating suppliers across the region andidentifying potential synergies.
  • We completed a requirements analysis across all the business units in line witheach business unit’s category strategy to ascertain the parcels of requirementthat would be most suited to be addressed via the e-sourcing (reverse auction) platform
  • We conducted a market research via RFIs to ensure that suppliers that would be participating on the auction had the required capability and capacity tosupport the requirements for respective business units
  • Based on the responses from the RFI, we built a bidding strategy and issued the RFPfor suppliers to price the detailed business requirements through the sourcingplatform
  • Once the suppliers had bid, we completed a due diligence exercise to ensure that thebid was legit and made sense and that there were no errors in the conversions given suppliers were normalized to one standard currency.
  • The e-sourcing event(auction) was conducted with25 suppliers across Asia Pacific bidding on various requirements. Theseincluded both incumbents and new suppliers

Outcome

Through the e-sourcing program

  • There was a consolidation of suppliers across the Asia Pacific region, throughmovement of parcels of business within the incumbent supply base driving 9% insavings in a category that was typically delivering 2-3% in sourcing savings
  • Some business units that had never executede-sourcing events saw savings up to 30% on some of their requirements.

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