The Project undertaken involved supporting an existing client within their Marketing Print spend category (promotional material). The existing client wanted to evaluate more sustainable routes of fulfilling their requirements as well as rein-in cost pressures.
Approach
Proposed Project Objectives
Understand supplier cost drivers – by engaging with the incumbent supplier and other similarly sized suppliers we were able to understand typical raw material stocking policies, existing price pressures and forecast price pressures.
Evaluate print need – by engaging with the existing supplier we were able to gauge that certain elements of the client’s print (size, colour variations,) were driving costs that didn’t give a noticeable benefit. Additionally, the way in which our client ordered the print vs. the supplier’s stocking policy and existing cost pressures meant the supplier did not pass on the cost savings of larger bulk orders (and stock already purchased).
Tactical benchmarking was then conducted – given the openness of the incumbent supplier when they were engaged properly, rather than launch a full and potentially relationship-damaging tender, tactical benchmarking was carried out in the background to validate the pricing the new supplier presented (along with the new print spec and longer order patterns we agreed with the client).
Basic Supplier Relationship Management (SRM) put in place – we then empowered a member of the client’s marketing team to understand how the supplier costed their work and introduced quarterly reviews (and email exchange) where the supplier could be open about cost pressures which gave them the confidence to cost competitively first time around.
1: Benchmark existing costs – and ensure both the baseline cost and increases are justifiable.
2: Engage more fully with incumbent suppliers – and ensure they both understand the client’s position and the client is aware of the cost environment within which the supplier operates.
3: Review more sustainable print options – and present these with cost options to the client for decision.
Results
By revitalising the relationship with the incumbent supplier, understanding the world in which they operated and reflecting things we learnt in our client’s prints spec, we were able to drive cost savings and negate cost increase pressures.
The incumbent supplier had the confidence to price competitively as they now had a stable relationship with our client and began presenting more sustainable printing routes as a result. These routes are slowly being introduced to the client, funded from savings made.
Annualised Savings
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