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Success Story - "Packaging Materials and Supplies"

Company Description

Privately held market leading manufacturer of medical, dental and animal health equipment.

Company Situation and Problem

  • Multimillion-dollar corrugated and packaging supplies spend with 13 incumbents
  • Approximately 500 items with sub-categories (corrugated, foam, misc. supplies and poly bags)
  • Multiple plants involved – Long term supplier relationships in tight-knit community offering extra value services

Paladin Actions & Recommendations

  • Internal stakeholder engagement to identify non-price requirements and KPIs
  • Supplier survey to gather data on non-price criteria
  • CombineNet’s advanced optimization solution enabling flexible bidding & various scenario analysis
  • 33 potential suppliers invited to bid; 15 participated
  • Pre-bid meetings with the incumbent suppliers and new bidders; supplier technology training
  • Bid evaluation and scenario analysis including alternate bids and product substitutions
  • Preliminary recommendation and further scenario analysis with customer
  • Short-list supplier visits
  • Business awards

Client Results

  • 28% savings while protecting incumbents, where appropriate
  • Reduced supply base to 7 suppliers
  • Implemented indexed pricing for corrugated
  • Maintained service levels

Advanced sourcing optimization enabled a more efficient and effective sourcing process: more bidders, alternate bids, conditional offers, and bundled bids. It also facilitated the involvement of internal stakeholders which garnered support for the final award: 28% savings while reducing the supply base and maintaining stringent service requirements.