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Case Studies

Sourcing & Procurement

Speed negotiations in multiple categories at a leading food & beverage company

A large packaged-food producer asked Applied Value to conduct supplier negotiations and implement savings within 6 months. Applied Value executed annualized savings of 4.4 MUSD across all categories.
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Situation

A large packaged-food producer was struggling to meet their end-of-year targets and had established an initiative to execute on additional savings with tail suppliers across all categories. Applied Value was asked to focus on areas and identify savings that could be implemented within six months and to conduct negotiations in the top opportunity areas including packaging, dairy, and non-commodity ingredients. 

Approach

Applied Value segmented tail suppliers to identify which suppliers to negotiate with face-to-face, via phone, and/or via standard letter. AV built a core strategy and approach alongside category owners. AV supported all required analyses and establishing a negotiation structure for each face-to-face supplier. AV led suppliers through standardized, fact-based negotiation structures to find cost-saving opportunities.

Results

Applied Value used fact-based negotiation with the 40 biggest suppliers, accounting for 150 MUSD. The result: 4.4 MUSD in annualized savings cross all cost categories.

4.4 MUSD million USD

COGS savings

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