25CLIENT: The leader of the FMCG sector in Poland, order of production under the "own brand" (private label)

CHALLENGE: The customer entrusts outside production for implementation by the foreign partner. Long-term exclusive contract is binding. Partner is trying to raise the price of the service by 20% and in the following year of cooperation indicating an increase in the price of one of the key raw materials.

ACTION TAKEN:

  • Comprehensive analysis of all P&L cost components and services of external production
  • Market analysis of key purchase categories (raw materials, packaging, labor, etc.) in the geography of the supplier and its subcontractors
  • Allowing the contractor to purchase two raw materials needed for production from other sources at Customer’s prices
  • Analysis of the abuse level of raw materials and packaging in the production process and launch
    of the elaborating project in range of contractor

RESULTS: 25% Savings: external service price maintenance at the current level (20%) and a further decrease in the cost of services in the next year of cooperation by reducing the abuse of production (5%). 

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How big profits are savings! (Cicero)

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