Multi-site UK packaging manufacturer

Challenge

The IESA purchasing team regularly review stock items that form the top ten highest-spend categories at each client location.

An opportunity was identified that would deliver significant cost savings to the client.

A specific tape was used at two different locations which historically had been purchased directly via distributors.

Two different companies were supplying the tapes and at different prices.

The manufacturer of the tape was already a supplier to IESA for a different client.

Objectives

  • The primary focus was to deliver cost savings to the client while also providing consistency in the supply and unit price for the same product used at multiple sites.
  • Without having to change the specification of the tape, IESA looked to consolidate the supply direct with the manufacturer.

Solution

The IESA procurement team designated to the client negotiated directly with the manufacturer.

IESA was able to negotiate a more competitive unit cost based on the volume already purchased through this particular company.

Benefits

  • The consolidation to one supplier provided consistency in prices across multiple sites.
  • The change in supply delivered cost savings of over £20,000 p.a. across the two locations.
  • The lead times also reduced, which allowed IESA to use its software to propose a reduction in the safety and economic order levels, delivering a further reduction in cost.